What Your CFO Isn’t Telling You About 2026 Layoffs and Raises
If you’re anything like me, you’ve probably caught yourself wondering what the next few years hold for our careers and our wallets. We hear snippets of news, see headlines about the economy, and maybe even feel a little uneasy about what’s coming down the pike. Well, I’ve been diving deep into what CFOs – those incredible financial strategists at the helm of companies – are truly thinking about 2026. And let me tell you, there’s a lot more nuance to the conversations around layoffs and raises than you might expect. It’s not just about simple cuts or generous pay bumps; it’s about a complex dance of agility, technology, and a very “K-shaped” economic reality.
Navigating the 2026 Economic Landscape: The New Reality
When I talk to finance leaders, one phrase keeps popping up: “uncertainty is the new certainty” [1]. It sounds a bit like a paradox, doesn’t it? But it perfectly captures the sentiment. CFOs aren’t just acknowledging that things are unpredictable; they’re building that unpredictability directly into their strategy and plan. Melissa Howatson, the CFO of Vena, put it perfectly, emphasizing the need for businesses to create “wiggle room” for those inevitable unknowns. This isn’t just a philosophical stance; it’s a practical approach to navigating an economy where persistent inflationary pressures are still a major player. We’re looking at the Consumer Price Index (CPI) potentially hovering around 4.1% by year-end 2026, a figure that will definitely restrict the number of interest rate cuts from central banks [1]. So, if you’re thinking about investing or even your personal financial guide, understanding these broad strokes is key.
The Bifurcated Economy: Industry-Specific Realities
One of the most striking insights is how the economy isn’t moving in one direction. We’re seeing what experts call a “K-shaped” recovery, meaning growth prospects are diverging significantly depending on the sector. On one hand, areas like technology and AI-driven sectors are experiencing strong tailwinds, almost like a strong current pushing them forward. Think about ecommerce or innovative apps leveraging the latest advancements – they’re booming. On the other hand, more traditional sectors like manufacturing, mass-market retail, and even some professional services are facing more pronounced growth challenges. It’s a tale of two economies, and where your business sits on that K-curve will largely dictate its outlook.
Corporate Strategic Imperatives: What CFOs Are Prioritizing
So, what are these finance chiefs actually doing to prepare? It boils down to a few critical areas.
Emphasizing Agility and Cost Vigilance
Forget rigid, long-term plans. The name of the game for 2026 is continuous forward motion with inherent flexibility. CFOs are deep into detailed scenario mapping, sketching out multiple futures and building robust contingency options. But it’s not just about adapting; it’s also about fierce cost discipline and protecting those precious margins. They’re trying to avoid “profitless prosperity,” a situation where a business sees its revenue grow but its actual profit shrinks. In fact, while a significant 67% of CFOs anticipate over 5% organic revenue growth in 2026, they’re also aiming for Selling, General & Administrative (SG&A) costs to grow 1-5 percentage points below that revenue growth. That’s a clear signal: efficiency is paramount.
Strategic AI Integration: An Operational Mandate
Here’s where things get really interesting: AI isn’t a “nice-to-have” anymore; it’s seen as a fundamental requirement. From an internal perspective, it’s all about enhancing efficiency and optimizing labor. Imagine automating manual processes across administrative functions – things that used to take human hours can now be handled by AI-enabled platforms. Take Litera, for example, which is leveraging Copilot to handle pricing queries and improve customer self-service. This isn’t just about saving money; it’s about freeing up human talent for more strategic, high-value work. It’s also making companies re-evaluate the classic “build versus buy” dilemma. With AI, companies can rapidly develop prototypes and validate market demand for new products or features, potentially reducing reliance on traditional mergers and acquisitions. This shift can offer a new way to manage investments and growth.
Mitigating External Risks: Tariffs and Geopolitical Swings
It’s not all internal focus, though. External risks are a huge concern. CFOs are proactively managing product portfolios and making supply chain adjustments to minimize exposure to fluctuating tariff rates. If you’re in manufacturing, for instance, you need deep expertise in HTS codes, material origins, and customs regulations just to assess your full tariff exposure. Beyond tariffs, there’s constant vigilance against unforeseen “blind spots”—things like foreign-exchange volatility, sudden geopolitical turbulence, and abrupt policy shifts in key international markets. These unpredictable factors can throw even the best plans off course.
Workforce Realities: Layoffs, Hiring Trends, and Compensation in 2026
Now, let’s get to what’s likely on many of our minds: what does all this mean for us, the workforce?
The Nuances of Layoffs and AI’s Influence
The headline often screams “AI is taking our jobs!”, but the reality is more nuanced. While AI integration is certainly driving productivity gains, and leading to “strategic” headcount adjustments, it’s not the primary driver of most layoffs. In fact, AI-related layoffs constituted under 5% (around 48,000 jobs) of the over 1.1 million job cuts announced through October 2025 [4]. The bigger picture reveals that broader economic conditions, strategic restructuring, and comprehensive cost-cutting measures (often starting with hiring freezes) remain the main forces behind layoffs [4]. Interestingly, an intriguing dilemma might emerge: the “price hike over layoff” situation. Analysts at Morgan Stanley suggest that companies might opt to continue raising prices to maintain headcount, effectively shifting the economic burden to consumers rather than cutting jobs [2]. It’s a delicate balance, and one worth watching if you’re trying to save or build an emergency fund.
Budget Reductions: Impact on Traditional Functions
Looking ahead, expect significant SG&A budget reductions in areas like human resources (57% of CFOs anticipate this), corporate IT (53%), and legal and compliance (40%) [1]. Why these specific areas? Because these are the functions where AI is perceived to have the greatest potential to automate or streamline many tasks. This means a rethinking of how these corporate functions operate and the skills needed within them.
The Future of Raises: Merit, Skills, and Value
If you’re wondering about raises in 2026, get ready for a shift. Across-the-board raises may become less common as companies focus intensely on margin preservation. Instead, compensation adjustments will likely be closely tied to individual performance, how much you contribute to efficiency gains, and whether you possess high-demand, indispensable skills [1]. It’s about demonstrating your value directly to the bottom line.
Cultivating Enduring Value: Indispensable Skills for the Evolving Workplace
So, how do we prepare for this evolving landscape? It’s all about proactive personal and professional growth.
Embracing Digital and AI Fluency
This isn’t about becoming a data scientist overnight, but it is about becoming proficient in leveraging AI tools. Think about how AI can enhance your productivity, automate mundane tasks, and help you extract crucial insights from data. My actionable advice? Don’t just read about AI; actively experiment with AI applications relevant to your role. Move beyond just awareness to practical application. This is a top tip for staying ahead.
Agility, Adaptability, and Continuous Learning
The constant change means a proactive, growth-oriented mindset is absolutely essential. The capacity to quickly adapt to technological shifts and market demands will set you apart. This isn’t just a buzzword; it’s a critical requirement. Continuous reskilling and upskilling are no longer optional extras; they’re vital to align with evolving corporate needs and remain relevant.
Data Literacy and Analytical Acumen
In a world driven by data, the ability to interpret complex information, derive actionable insights, and quantify your contributions is highly valued. It’s about transitioning from simply executing tasks to proactively identifying problems and generating solutions based on data. Knowing how to find and interpret data can be a game-changer.
Enhanced Interpersonal and Collaborative Skills
Even with increasing automation, sophisticated communication, empathetic leadership, and effective cross-functional collaboration remain absolutely critical. In fact, as AI handles more routine tasks, the human skills of connection, creativity, and complex problem-solving become even more vital. We’ll also need to develop skills to effectively collaborate with AI tools and the teams that integrate them.
Preparing for the Road Ahead: A Proactive Stance
What I’m taking away from all this is that 2026 isn’t about hunkering down and hoping for the best. It’s about being actively involved in shaping your own future. Consistently assess and refine your personal skill set against emerging industry demands and technological advancements. Develop a nuanced understanding of economic indicators and your organization’s financial health so you can anticipate shifts. Whether you’re a certified planner or just someone trying to secure your financial freedom, taking a proactive stance with your career strategy and personal financial guide is your best investment. Think about setting up a savings account or bolstering your emergency fund – these are always good tips for any uncertain market.
Spend some time for your future.
To deepen your understanding of today’s evolving financial landscape, we recommend exploring the following articles:
War Economy Chapter 2: Why Economic Models Break Down During War
Salary Negotiation 2026: How to Get Paid More for Your AI Skills
The 5 Skills You Need to Survive the 2030 Finance Automation
Explore these articles to get a grasp on the new changes in the financial world.
Disclaimer: This blog post is intended for informational purposes only and does not constitute financial, investment, or professional advice. The economic forecasts and insights shared are based on current expert opinions and data, which are subject to change. Always consult with a qualified financial advisor or professional planner for advice tailored to your specific situation before making any investment decisions or changes to your financial plan.
References
- J. Pellet, “Economic Outlook 2026: ‘Uncertainty Is The New Certainty’,” CFO Leadership. [Online]. Available: https://cfoleadership.com/economic-outlook-2026-uncertainty-is-the-new-certainty/
- L. Duan, “Morgan Stanley: Companies May Avoid Layoffs in 2026 with Price Hikes,” LinkedIn, Mar. 19, 2024. [Online]. Available: https://www.linkedin.com/posts/lijun-duan-71832612a_wallstreet-activity-7411419679581171712-aFfQ
- Gigaom, “The Layoff Excuse,” Gigaom. [Online]. Available: https://portal.gigaom.com/blog/the-layoff-excuse-insight-out
- D. Swift, “🚨 Over 1.1 million job cuts in 2025. But the story isn’t AI. And it isn’t a recession collapse,” LinkedIn, Feb. 20, 2025. [Online]. Available: https://www.linkedin.com/posts/swiftdouglas_economy-labormarket-macrotrends-activity-7407808899526909952-ZFKu
