U.S. CEOs Plan 34% Workforce Reductions Amid Tariff Concerns and Cautious Hiring Outlook

A third of U.S. CEOs plan to reduce their workforce over the next 12 months, according to the Conference Board’s Q3 U.S. CEO Confidence Survey, with 34% expecting a net reduction in staff—either through layoffs or not replacing departing employees. This marks a shift from Q2, where 28% of CEOs anticipated similar cuts [1]. The data reflects growing concerns over economic headwinds, particularly from potential new tariffs under the Trump administration. At the same time, CEO confidence has rebounded compared to the previous quarter, with fears of an imminent recession dropping from 83% in Q2 to 33% in Q3 [1].

Despite this slight optimism, hiring plans remain cautious. Only 27% of CEOs intend to expand their workforce in Q3, down from 28% in Q2, while 39% plan to maintain their current staffing levels, a decrease from 44% previously [1]. The Conference Board’s Roger W. Ferguson Jr. noted that for the first time since 2020, more CEOs are expecting workforce reductions than expansions [1].

The labor market is also showing signs of strain. According to Macquarie’s North America economists, recent data from the Bureau of Labor Statistics (BLS) reveals a rise in unemployment among labor force entrants and re-entrants, who struggle to gain a foothold in the job market [1]. Although initial jobless claims remain low, continuing claims have increased, signaling that those who have lost jobs are facing greater difficulty in finding new roles [1].

Meanwhile, companies are grappling with rising costs linked to global trade policy shifts. A record 93% of CEOs plan to adopt AI or automation to reduce expenses, and 64% intend to pass on these added costs to consumers, with an additional 16% still considering it [1]. This represents a notable increase in tariff cost passthrough compared to earlier surveys, such as the June report by the New York Fed, which found 45% of service firms planned to pass on the full burden of tariff-related increases [1].

Stephanie Guichard, senior economist at The Conference Board, noted that while CEO confidence has improved, it has not signaled a return to optimism. The recovery in sentiment may reflect easing U.S.-China trade tensions and ongoing negotiations [1]. However, pessimism about industry-specific conditions persists, with many CEOs still forecasting economic challenges in the near term [1].

Source: [1] A third of CEOs plan to axe jobs over the next year—and most now say they’ll pass on new tariff costs to their customers (https://fortune.com/2025/08/08/ceos-cut-jobs-tariff-costs/)