Wednesday, January 14, 2026

What 2026 holds for the future of work

As I was collecting Crystal Ball predictions for 2026 from readers, I found myself thinking a lot about the future of work. 

In part, of course, that’s because you all were thinking about it—combing through email after email, I found waves of predictions about how AI will change our workplaces and our jobs. And I sensed two things: An undercurrent of anxiety, and a resounding sense that AI is our now and future coworker. 

The anxiety may have been yours, readers, but it was perhaps mostly mine: I think it’s possible we’re moving towards a future where the most mundane tasks we humans have to do right now are taken over by agentic armies in a way that’s fundamentally good. Much as the Internet created new ways of working that have improved people’s lives, I’m hopeful that AI can too. But then, there’s part of me that says: No, we’re about to move into a world of relentless job contraction and depersonalized professional interactions, made more depressing by the fact they spring from craven laziness above all else.

All of this to say, I’m conflicted. And my ambivalence isn’t helped by the fact that Term Sheet readers—many of whom are investing in the technologies and startups that will shape tomorrow’s workplace—have divergent perspectives. Here’s a sampling of how readers are thinking about an issue that will only become more consequential going forward:

We will start hiring digital employees. We will start treating AI agents like junior staff with job titles, budgets, and spending limits. Once an agent can issue a refund or buy inventory, it stops being a tool and becomes a worker. —Cathy Gao, partner, Sapphire Ventures

You can now build digital autonomous workers that handle large portions of front-office work. We’re heading toward models and agents that can complete a full day’s worth of work with minimal or no human intervention, and we may already be there in some domains. —George Mathew, managing director, Insight Partners

In 2026, companies who rushed to make layoffs hoping AI would fill a significant gap will realize they need to re-hire to fill some of those roles. We saw this starting this year with companies like Klarna, re-hiring to fill customer service roles that chatbots failed at. Next year, we’ll see more of this. —Mahe Bayireddi, CEO and cofounder, Phenom

2025 made it clear that AI would shrink teams by carrying more of the workload. In 2026, the bigger shift will be who gets hired. Companies are increasingly pairing a small number of senior technical leaders with AI-fluent operators, often without traditional CS backgrounds. For VCs, this shift will redefine what a ‘strong early team’ looks like and how capital efficiency is priced. —Jiaona Zhang, CPO at Laurel

New grad hiring will continue to slow and niche talent, either for AI or specific backend infra, will be paid top dollar. As AI makes boilerplate programming table stakes, only great talent will be rewarded. Fewer people will want to major in Computer Science. —Deedy Das, partner, Menlo Ventures

The tensions around returning to the office in any form of mandated pattern are going to continue. While employers might argue it’s a hirer’s job market, if we have an exodus of talent it’s really hard to replace those skillsets. —Livia Bernardini, CEO, Future Platforms

The first real shockwave from AI won’t hit junior analysts; it’ll hit outsourcing. Anything that was being subcontracted to offshore hubs is up first, as AI takes over the repetitive, process-heavy work that used to justify those models. —Raj Bakhru, general manager and cofounder, Blueflame AI

Human judgment will stay at the heart of HR. While AI will streamline recruiting, compensation analysis, and enhance employee experience, humans will remain essential for interpreting nuance, intent and values. HR functions will evolve toward augmented intelligence. —Niki Armstrong, chief administrative and legal officer, Pure Storage

In 2026, agentic AI moves from copilots to autonomous operators. Agentic systems will handle entire workflows, turning automation into a competitive weapon. —Diane Yu, cofounder, Tidalwave

We will see companies and consumers ‘hire’ AI agents to act on their behalf. 2026 will be the year society adjusts to the new realities of AI agents and focuses on what guardrails we expect from the companies behind them. —Don Butler, managing director, Thomvest Ventures

The Term Sheet Podcast is back!… Our first episode of 2026 just dropped. My guest: Jenny Xiao, founder of Leonis Capital and former OpenAI researcher. She talks about why AI companies should be valued closer to (or even below) SaaS, the role academia plays in AI progress, the possibility of another “DeepSeek” moment, and more. Listen and watch here.

See you tomorrow, 

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joey Abrams curated the deals section of today’s newsletter. Subscribe here.

VENTURE CAPITAL

PRIVATE EQUITY