CEO Confidence Hits 5-Year Low as Layoffs Loom

In a troubling sign for the U.S. economy, CEO confidence has fallen to its lowest point in five years, according to a new survey. Nearly 40% of business leaders plan to reduce their workforce in the next six months, raising alarm bells about widespread layoffs and a potential slowdown.

The Conference Board, a nonprofit research group, released its Q2 2025 CEO Confidence Survey earlier this week, revealing a stark shift in business sentiment. The confidence index dropped from 53 in the previous quarter to 42—the lowest since early 2020, at the start of the pandemic. Any reading below 50 indicates more negative than positive responses among CEOs.

Layoffs Are on the Horizon

Perhaps the most concerning result of the survey is that 39% of CEOs reported plans to cut jobs in the next six months. This marks a sharp increase from just 21% who planned layoffs in the first quarter.

According to The Conference Board report, many companies are bracing for economic uncertainties such as inflation, rising interest rates, and slowing consumer demand. These conditions are pressuring businesses to reduce costs—often starting with the workforce.

Dionne Gumbs, CEO of GenEQTY, told CNBC that “employers are now choosing efficiency over growth.” She added that AI, automation, and remote work technologies are making it easier for companies to streamline operations with fewer people.

What’s Driving the Confidence Collapse?

Multiple factors are behind the growing pessimism among CEOs:

• Inflationary pressure: Despite some moderation, prices for goods and services remain elevated, squeezing margins.
• Higher borrowing costs: The Federal Reserve’s interest rate hikes over the past two years have made capital more expensive.
• Global uncertainty: Geopolitical tensions, especially in Eastern Europe and the Middle East, continue to weigh heavily on strategic planning.
• Evolving workforce dynamics: The post-pandemic shift to hybrid and remote work models has forced a major reevaluation of labor needs.

According to Bloomberg, CEOs are also concerned about weak business investment and tepid consumer confidence heading into the second half of 2025.

Sectors Most Likely to Cut Jobs

While the trend toward layoffs is widespread, some sectors are more vulnerable than others.

• Technology: A key driver of the job boom during the pandemic, tech companies are now leading the layoff trend. Companies are focusing on profitability and trimming non-essential roles.
• Retail: With consumer spending softening, retailers are adjusting their labor force to avoid inventory and payroll burdens.
• Finance: As deal-making slows and compliance costs rise, financial institutions are also tightening headcounts.

However, industries like healthcare, energy, and AI-driven services are expected to remain relatively stable or continue hiring selectively.

CEOs Brace for a Tough Second Half of 2025

The survey reveals that 75% of CEOs expect the U.S. economy to weaken further before the end of the year. Nearly half anticipate lower demand for their products and services, and many are freezing hiring altogether.

Kathy Bostjancic, Chief Economist at Nationwide, noted, “While we are not in a recession yet, the mood among top executives signals that they’re preparing for a prolonged period of economic strain.”

She added that consumer behavior—especially discretionary spending—will be a key indicator to watch in the coming months.

The Role of Artificial Intelligence in Restructuring

One of the silent drivers of the coming job cuts is the rise of artificial intelligence and automation. Many CEOs now see AI not just as a tool for innovation but also for cost reduction.

According to a related report from McKinsey & Company, over 60% of businesses implementing AI solutions expect workforce adjustments in 2025. Repetitive or administrative roles are particularly at risk.

While AI may increase efficiency, the trade-off could be significant displacement of workers, especially those without high-tech skills.

Government and Worker Reactions

Labor advocates are raising concerns over the wave of planned layoffs. The AFL-CIO, one of the nation’s largest labor unions, has urged companies to “explore alternatives to mass firings,” such as retraining or redeployment.

On the government front, the Department of Labor is reportedly reviewing economic safety nets in anticipation of job losses. Programs that support job retraining, unemployment benefits, and wage subsidies may be revisited if the layoff trend accelerates.

At the same time, some analysts believe this is part of a natural economic cycle, where periods of strong growth are followed by correction phases. “It’s painful, but it doesn’t necessarily signal collapse,” says economist Jared Newman from the Brookings Institution.

Job Seekers Should Stay Alert and Adaptive

With job markets tightening, experts suggest that professionals—especially in vulnerable sectors—start preparing early:

• Upskill: Learn in-demand tech skills like AI, data analytics, or cybersecurity.
• Stay connected: Build a strong LinkedIn network and follow job market trends.
• Explore growth sectors: Industries like green energy, healthcare tech, and remote work solutions still show hiring momentum.

Career strategist Madeline Mann suggests job seekers remain flexible: “The job landscape is shifting. Those who adapt fastest will face fewer disruptions.”

Final Outlook

The next six months could prove challenging for both companies and workers, as confidence among top executives falls to multi-year lows. Layoffs may become more frequent, especially in industries exposed to high costs, digital disruption, or weak demand.

Still, the economy has proven resilient before, and a wave of innovation—especially in AI—may open new doors, even as others close.

For now, business leaders, policymakers, and workers alike must prepare for an uncertain road ahead.

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