For the First Time, More CEOs Plan to Cut Their Workforce Than Grow It
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The headline finding from 141 Fortune Global 500 CEOs surveyed May 4-18: for the first time in the survey’s history, more CEOs plan to reduce their workforce over the next 12 months than plan to expand it. 31% expect to cut headcount, up from 27% in Q1. 28% plan to grow, down from 31%. 40% expect no change. As Conference Board Chief Economist Dana M. Peterson described it: “CEOs reported that the economy is materially worse now than it was six months ago and expected economic conditions to weaken further over the next six months.”
The underlying numbers show how sharp the mood shift was. 47% of CEOs said the economy is worse now than it was six months ago, up from 8% in Q1. 40% expect conditions to worsen over the next six months, up from 13%. In their own industries, 22% expect conditions to worsen over six months (up from 14%), while those expecting improvement fell from 51% to 38%.
The context Axios captured: CEO optimism surged when Trump took office, on hopes of deregulation and tax cuts. Liberation Day tariffs knocked that down. The administration backed off the harshest tariff policies, and confidence began to recover, but the war in Iran ended the recovery.
What’s unusual is the capital spending signal. Despite the pessimism, 37% of CEOs still plan to increase capital expenditure over the next 12 months, up from 35% in Q1. Only 8% plan to cut it. As Roger W. Ferguson, Jr., Vice Chairman of The Business Council, noted, investment plans “stayed the course.” CEOs are saying they’ll keep spending while reducing headcount. That tells you what they’re investing in: tools, automation, and AI infrastructure. The 25% of CEOs who believe more than half their workforce will need to be upskilled within two years is the workforce version of the same story.
What I see at 4 Corner Resources lines up with this. Clients are still approving some headcount, but the bar is higher. Mission-critical roles move. Nice-to-have roles stall. Sentiment shifts like this don’t reverse in a quarter. For employers with open positions to fill: move on the roles that matter now. For anyone looking for work: the market is tightening in specific sectors. Pay attention to which industries the CEO cuts are concentrated in.
AI Is Reshaping Who Gets Hired & Whose Offer Gets Pulled
ZipRecruiter’s Q2 2026 New Hires Survey tracks what the job market actually looks like for people who recently went through it. The median experience: 16 applications, 5 interviews, 2 offers, 5 weeks of searching. Underneath those medians, the market is splitting into separate lanes.
The AI lane is the widest. New hires who used AI tools during their search received twice as many offers as those who didn’t. 35% of new hires encountered AI at some point in their interview process, up from 22% in Q4. About 11% had to demonstrate AI proficiency in a technical assessment. The gap: only 12% of new hires list AI skills prominently on their resume, and 36% mention them at all. The skills employers increasingly require aren’t the ones most candidates advertise. That’s a mismatch worth fixing before the next job search.
Then there’s the rescinded offer problem. The overall rate has dropped to 16%, the lowest in over a year. The exception: for roles requiring AI skills, 39% of new hires had an offer pulled. ZipRecruiter’s Nicole Bachaud reads that as employer demand for AI talent outpacing employers’ ability to actually define the role. If you’re considering an AI-labeled position, ask hard questions about what the day-to-day work looks like and how stable the team budget is before you resign from your current job.
The gender gap data deserves its own conversation. Women submitted more applications than men (18 vs. 15), received fewer interviews (4 vs. 5) and fewer offers (1 vs. 2), and 30% reported lower pay in their new role compared to 16% of men. Women negotiate at about half the rate (25% vs. 46%), but when they do negotiate, the outcomes are nearly identical to men’s. The issue is that women are getting fewer offers, and fewer offers mean less bargaining power. That’s entirely upstream of the negotiation conversation. For employers serious about closing pay gaps: the focus belongs on equalizing access to AI tools, AI training, and the application funnels that filter who gets interviews.
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Salaried Workers Are Pulling Away From Hourly Workers on Pay
Indeed Hiring Lab’s Sneha Puri published new wage research showing a widening gap in pay growth between salaried and hourly workers. Salaried jobs saw posted pay grow 2.9% from Q1 2025 to Q1 2026. Hourly jobs grew 1.7%. A 1.2-point gap that shows up across nearly every industry where the two pay structures coexist.
The more striking finding is where hourly pay went negative. Posted hourly wages fell year-over-year in software development, IT systems and solutions, data and analytics, industrial engineering, marketing, and sales. The same sectors where AI displacement conversations are loudest are already seeing the hourly tier squeezed on pay. The salaried tier in those same fields is holding.
The structural reason: entry-level workers, contractors, freelancers, and interns are more often compensated hourly. They’re starting at a lower base and growing at a slower rate than salaried colleagues doing comparable work. And because posted wages broadly signal what employers are willing to pay, slower advertised hourly growth means slower raises for hourly workers already in those seats.
The benefits side widens it further. Salaried workers are more likely to receive employer-provided health insurance, retirement contributions, and paid leave. Two people doing comparable work for the same hours in the same office can be on genuinely different long-term financial trajectories based purely on whether their offer letter said “annual salary” or “per hour.” For anyone early in their career weighing a salaried offer against hourly flexibility: the structure of the offer is a pay-trajectory decision, and that decision compounds over time.
Weekly Claims Tick Up to 215,000 as the Four-Week Average Rises
Initial jobless claims for the week ending May 23 came in at 215,000, up 5,000 from the prior week’s revised 210,000. The four-week moving average climbed to 209,000, an increase of 6,250 from the prior week’s revised average of 202,750. Historically low in absolute terms. But the direction shifted: the four-week average had been falling for several weeks, and this is the first meaningful upward move.
215,000 is still a number that, in most economic cycles, would signal a healthy labor market. The low-hire, low-fire dynamic that’s defined 2026 remains in place. But pair the claims uptick with today’s CEO confidence data, and you get a picture of a labor market at an inflection point. One week of rising claims doesn’t make a trend. The next several weeks will matter.
Frequently Asked Questions
ZipRecruiter’s Q2 2026 data show that 39% of new hires who accepted roles requiring AI skills had their offers pulled, more than double the overall rescission rate of 16%. The likely cause is that employer demand for AI talent is outpacing employers’ ability to define what those roles actually require. Companies are posting AI requirements before they’ve figured out the work.
According to Indeed Hiring Lab’s May 2026 analysis, posted wages for salaried roles grew 2.9% year-over-year versus 1.7% for hourly roles. Hourly wages actually fell in several sectors, including software development, IT, and data analytics. Beyond base pay, salaried workers are also more likely to receive employer-provided health insurance, retirement contributions, and paid leave, widening the total compensation gap over time.
