2026 Employee Benefits Market Outlook 24 AIs Growing Influence on the Workplace AI is rapidly transforming the way organizations operate, with significant implications for HR and employee benefits administration. AI is driving efficiency, improving decision-making and even impacting the labor market. One of the most significant areas of impact is how AI is changing the way employers manage bene- fits and workforce strategies. Here are some ways that employers will be using AI in 2026. Changing Jobs Landscape AI isnt just reshaping processes; its fundamentally altering the job market. In 2025 alone, U.S. compa-nies announce d more than 1 million layoffs, with AI cited as a major factor in restructuring efforts. October 2025 marked the biggest reduction in more than 20 years. Tech giants like Amazon and Salesforce have been at the forefront of this trend. Amazon cut 14,000 corporate jobs, citing AI-driven efficiencies and organi- zational streamlining as key drivers. Similarly, Salesforce eliminated 4,000 customer support roles, explaining that AI now handles up to 50% of the companys work- load through its Agentforce platform. While AI is commonly cited as a cause of layoffs at major employers, its impact is also shifting jobs into other industries. For example, jobs may be expanded in growing sectors such as AI development, energy and data centers. Furthermore, in general, employers will be looking for workers who possess the technology skills to implement AI and stay current with the evolving market. In fact, Microsoft reports that more than 85% of Fortune 500 companies use Microsoft AI solutions and that two-thirds (66%) of CEOs report measurable business benefits from generative AI initiatives, espe- cially related to operational efficiency and customer satisfaction. While these moves are often framed as steps toward innovation, experts caution that the promised produc- tivity gains from AI remain uneven. A recent Boston Consulting Group survey found that 60% of firms reported minimal revenue or cost improvements, despite significant investment in AI, raising questions about whether AI is being used as a genuine efficiency tool or as a narrative for cost-cutting. Personalized Benefits Programs Traditional benefits packages often follow a one-size- fits-all approach, which can leave employees feeling underserved. AI changes this dynamic by enabling data-driven personalization. Mercer s latest Global Talent Trends study found that approximately 40% of HR leaders use AI for benefits administration. Furthermore, more than half (53%) of executives expect AI to boost productivity by 10%-30% over the next three years, fueled by human-AI collaboration. AI systems can analyze employee data (e.g., health claims, lifestyle preferences and engagement history) to recommend benefits that align with individual needs. This means employees are more likely to be offered rel- evant options, such as mental health support, fertility services or chronic disease management. The result is a more meaningful benefits experience that drives higher satisfaction and utilization.