I’m going to start us off with some data about the broader market, because that’s our customers.
Smaller businesses in the United States are facing significant challenges in the current economic climate, as they are shedding jobs at alarming rates. Recent data from payroll processor ADP indicates that small firms, defined as those with fewer than 50 employees, accounted for a net loss of 120,000 jobs in November 2025, the highest since the onset of the pandemic. In contrast, larger companies have been able to adapt more effectively to economic pressures such as high tariffs and interest rates, and are continuing to grow. Experts, including ADP chief economist Nela Richardson, noted that larger firms have more tools at their disposal to manage costs and labor, highlighting a growing divide between small and large enterprises in terms of resilience and job creation.
In 2025, over 1.1 million job cuts have been reported in the United States, marking the highest number of layoffs since the COVID-19 pandemic. According to Challenger, Gray & Christmas, this figure represents just the sixth occurrence since 1993 where layoffs have exceeded 1.1 million in a year. The majority of these cuts occurred early in the year, with over 600,000 jobs eliminated by the end of April, reflecting significant changes in the labor market. In November alone, companies announced 71,321 job cuts, a 24% increase from the same period last year, with telecommunications leading the layoffs at over 15,000 jobs. Restructuring and economic conditions have been cited as common reasons for these layoffs, alongside the increasing impact of artificial intelligence, which has accounted for approximately 55,000 job losses this year.
A recent study from the Massachusetts Institute of Technology reveals that artificial intelligence has the potential to replace 11.7% of the U.S. workforce, equating to approximately $1.2 trillion in wages across sectors such as finance, healthcare, and professional services. Using a labor simulation tool called the Iceberg Index, researchers modeled how 151 million workers would interact and be affected by AI advancements, indicating that the visible layoffs in tech roles represent only a small fraction of the total wage exposure, which includes many areas often overlooked in automation forecasts. The Iceberg Index provides a detailed analysis of how AI could reshape labor markets nationwide, emphasizing that job disruptions are not confined to coastal tech hubs but are widespread across all states, including rural areas. This simulation tool enables policymakers to explore various scenarios and prioritize training investments to better prepare for AI’s impact on employment and GDP, ensuring that states can address potential risks proactively.
A recent report from Forrester predicts that by 2026, companies will begin managing digital employees alongside human workers. This forecast follows comments from Marc Benioff, CEO of Salesforce, who suggested that the era of exclusively human management is ending. Forrester highlights that sophisticated AI agents will be capable of executing complex tasks independently, requiring a shift in how leadership orchestrates workflows. Notably, human capital management techniques, typically used by large enterprises, may soon benefit smaller businesses as they integrate AI into their operations. Despite these advancements, Forrester reassures that complete automation of business units remains years away, emphasizing the continued need for human oversight in management roles.
Why do we care?
Our customers are under pressure. Small businesses are shedding jobs, and when headcount shrinks, so does their appetite for anything that looks like a new initiative. They’re going to push back on spend, question every tool, and look for ways to simplify. If your value is tied to “keeping the lights on,” you’re going to feel that pressure directly.
But midmarket customers? Different story. They’re not collapsing — they’re reorganizing. AI and automation are becoming part of their workforce strategy. They’re trying to do more with the people they have, and that means technology becomes part of the labor equation. Those customers want help mapping workflows, tightening identity, and figuring out where automation actually moves the needle.
And here’s the trap: the hype around “digital employees” will confuse people. Some will think agents replace workers tomorrow. Others will freeze spending because they want to “wait and see.” We have to be the adults in the room and ground this in reality. Automation works best when you understand the process, the data, and who’s accountable. That’s where providers can shine.
So why do we care? Because the market is splitting. SMBs need stability. Midmarket needs clarity. Both need someone who can talk about outcomes, not tickets or tools. If you’re not tying your work to productivity — to actual business results — you’re going to struggle. But if you lean into helping customers navigate uncertainty and rethink how work gets done, this environment can actually be an advantage.