𝐓𝐡𝐞 𝐐𝐮𝐢𝐞𝐭 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐈𝐦𝐩𝐚𝐜𝐭𝐢𝐧𝐠 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭

𝐓𝐡𝐞 𝐐𝐮𝐢𝐞𝐭 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐈𝐦𝐩𝐚𝐜𝐭𝐢𝐧𝐠 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭

Happy Holidays! I hope everyone has been having a good time with family and friends.

I decided to hold off until the last minute of 2025 before releasing the good (?) news about how I see 2026 rolling out. Jobs are still on the top of my list as the biggest influence on the economy next year. On paper, employment still looks… fine. But the numbers are fibbing a bit, and we have not seen a clear picture on that front yet. And how much credibility do you put in numbers that can be off 100k jobs monthly. (or a 911k overestimation of new jobs from April 2024 to March 2025) That’s an average of +76,000 jobs a month. Every month for 12 months….. really?

It looks like I finally have some company when it comes to the numbers.

Part of what’s propping them up is something no one loves to talk about: undocumented workers quietly leaving the labor force. When people exit the system entirely, unemployment doesn’t spike the way you’d expect. It smooths. It masks. It buys time.

Something else is happening under the surface, which is why I think we are going to see some unemployment issues as this new technology moves into the deployment phase.

AI hasn’t fully lifted business operations yet. Not in a dramatic way where efficiencies allow a business to operate at the same level with fewer people. But the tools are finally getting good enough to matter. Data extraction, documentation, quoting, coordination, follow-ups. The boring stuff. The expensive stuff.

Most companies haven’t figured this out, and how to scale it yet. But they’ve already bought the infrastructure. The chips. The platforms. The licenses. 2026 is when that capability starts showing up in real workflows.

And when productivity rises quietly, hiring changes first.

You don’t see mass layoffs. You see no hire. You see no replacement. You see roles stretch, merge, or disappear without an announcement.

That’s how efficiency-driven slowdowns work.

Smaller companies are feeling it first. They have less margin for errors, fewer buffers, and more exposure to rising costs. They’re cutting hours, delaying hires, and tightening everything that can be tightened. Job losses and bankruptcies are not hitting all companies equally. They’re falling along a very predictable fault line: size, access to capital, and operational maturity. (when I read how they described the level of efficiency within a company, I thought, that’s a nice way to describe it. (Far better than me yelling in the middle of a room then dropping the mike! Only to realize I am by myself)

Larger companies can absorb longer. They always do.

So if it feels like things are “busy but tense,” or “steady but fragile,” you’re not imagining it.

This isn’t a crash. It’s a sorting out process. Like- “when you come up to the Great Divide, go right, you go right, you go right, …. Then after a 100 or so have gone right… “you there, go left!”

And the businesses that come out ahead won’t be the loudest adopters of AI. They’ll be the quiet ones who used it to remove friction and waste before the pressure really showed up.

Later, we’ll all hear them say the same thing:

“We acted early.” Plain and simple.. Let's chat if you are interested in exploring the left side.

Get on the stick! It’s almost 2026. thad