87% of HR Leaders Planning Layoffs Because of These 2 Reasons

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A new study by LHH finds 87% of HR leaders are planning in 2026, and the key reasons are AI & Skills Mismatch.

87% HR leaders Plan Layoffs in 2026

Layoffs have become impossible to escape. Tech giants, retailers, media companies, and almost every industry have announced cuts. 

Now, the LHH Career Redeployment and Outplacement Trends Report of 2026 is proving that this trend is going to stay for a long time. 

The report surveyed more than 3,000 HR leaders and over 8,000 employees across major global markets, including the United States, Canada, Switzerland, the United Kingdom, France, Brazil, and Australia. 

Its findings reveal that continuous workforce restructuring has become a common business practice as companies adapt to economic uncertainty, digital transformation, and the increasing impact of AI on jobs.

According to the report, 87% of HR leaders say their organization has either already conducted layoffs or is planning them in the next 12 months. That figure is up from 77% in 2023 and 73% in 2024. 

So, this trend is clearly accelerating, not slowing down.

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The report also highlights the emotional impact these layoffs are having on employees. Around 51% of workers in 2025 said they are worried about being laid off by their current employer, compared to 36% in both 2023 and 2024. 

This increase reflects rising concerns about job security and long-term career stability.

In addition, economic uncertainty and constant layoff news are creating high levels of stress and anxiety among workers.

78% HR Leaders Say Layoffs are Now Regular

The most concerning thing is that layoffs are no longer emergency responses to a crisis. They have become routine. 

According to the same study, 78% of HR leaders now describe layoffs as "regular" and not one-off events.

In the past, layoffs were mostly linked to cost-cutting or major restructuring. However, the research shows that companies are now making workforce changes for many different reasons. 

About 41% of HR leaders said layoffs are mainly driven by skills-related changes, where companies are trying to build teams with new and updated skills. 

Another 37% said continuous market changes are the main reason behind layoffs. 

Only 22% described layoffs as one-time events.

The research suggests that employers should focus more on skills-based workforce planning, employee training, reskilling programs, and flexible work models. 

These approaches can help businesses adapt more effectively to constant change while also supporting employees during transitions.

AI and Skills Mismatch are Key Reasons behind Layoffs

In 2023, the biggest reason for layoffs was overhiring during previous years. Many companies had rapidly expanded their workforce during periods of economic growth and increased digital demand at the start of this decade.

However, as market conditions changed, businesses began reducing staff. Cost-cutting was the second largest driver at 40%, followed closely by restructuring and reorganization at 39%. 

In 2025, the workforce landscape changed even more dramatically. 

AI and automation emerged as the top driver of layoffs, cited by 21% of HR leaders. Skills mismatches followed at the same percentage, while mergers and acquisitions accounted for 20%.

 The findings suggest that companies are increasingly restructuring their workforce to align with new technologies. 

While AI is becoming an important factor in layoffs, the research also shows that it is not the only reason employees are losing jobs. Skills gaps are equally important, as many organizations struggle to find workers with the abilities needed for modern roles.

Bottom Line

Layoffs not only impact the employees who lose their jobs. They also have a strong emotional effect on the people who remain within the organization. 

The research also found that around 73% of employees witnessed a coworker being laid off during the past year. 

For many workers, seeing colleagues suddenly lose their jobs created feelings of uncertainty, stress, and fear about their own future within the company. This can lead to burnout, lower motivation, and reduced productivity over time.

As layoffs become more common, companies need to understand that the effects extend far beyond short-term cost savings. Organizations that fail to communicate openly and support employees during workforce changes risk damaging culture.