News outlets have recently reported that layoff announcements have reached pandemic levels, which is deeply worrying, but not unforeseen. In early 2025, the World Economic Forum reported that 41% of organizations plan to reduce their workforce in the face of rapidly advancing AI. In the second half of this year, six in 10 business leaders planned to reduce their workforce. But while reducing labor costs may have been the most touted strategy for weathering macroeconomic instability, it was not the only strategy.
Upwork Research Institute has identified some companies with different strategies that are poised to surpass corporate organizations in innovation and resilience in 2026.
Our research shows that small and medium-sized businesses (SMBs) with 10 to 499 employees largely avoid the large-scale layoffs that dominated the headlines. Instead, they used AI to change the scale equation, applied experimentation, and invested in flexible talent to deal with the disruption around them. And as a result, they became even more powerful drivers of innovation. In fact, nearly half of small business leaders maintained high confidence through the 2025 economic shock. This highlights that their approach was not only different, but more resilient.
In 2026, more companies will need to start thinking “small” to drive sustainable growth in a turbulent world. This means moving away from viewing talent as a significant cost to manage, and toward unlocking the synergy between talent and AI. Based on what has worked for small businesses that have performed well this year, here are 2026 strategies for leaders to follow to drive sustainable growth.
Use AI as an augmentation, not a replacement.
In 2026, more companies will move beyond AI Adoption To fully enable AI workflow. For example, marketing teams use generative AI to draft campaigns while humans review brand voice and creative iterations. Or perhaps an AI agent can prioritize procurement approvals, freeing up finance teams to focus on strategy. This is a realistic scenario, as the number of small business leaders planning to expand their AI agents has increased by 12 percentage points this year. Bottom line: AI enables teams to do more without necessarily having to hire more people.
Harness the power of experimentation
If anything is certain, it's that nothing is certain. Business leaders may not be able to predict what will happen next in a volatile macro environment, but they can embody and cultivate a mindset that enables them to succeed no matter what happens. Whether it's running a rapid AI pilot project, testing a new customer experience model, or redesigning a team structure, the best leaders adapt through continuous and measurable experimentation, learning from what isn't working rather than avoiding it. Small organizations have an advantage here. They can pivot more quickly and bring their employees with them by leveraging change management best practices that take months to implement at larger peers. This approach allows companies to anticipate and effectively respond to changing market needs. 60% of small and medium-sized businesses that incorporate experimentation into their culture report “superior” customer satisfaction outcomes in 2025.
think differently about people
In 2026, the mindset of “hiring more people” will be replaced by the mindset of “accessing the right talent, when and how you need it.” This becomes especially important as AI permeates every part of organizational functions. These tools provide a path to expansion, but they cannot work in isolation, and having the right people in place is key to realizing their value. As budgets continue to tighten in 2026, mixed teams will present effective solutions. FTE maintains a strong knowledge base within the organization, and external talent provides business leaders with access to specialized skills not available internally, such as AI coding and data science.
Rising costs and increasing pressure are today's realities. The same goes for change. Beyond expected layoffs, the World Economic Forum predicts that 92 million jobs will be lost worldwide by 2030, while 170 million new jobs will be created. While cost reductions may improve balance sheets in the short term, they are ineffective at creating sustainable, long-term value and leading the coming workforce transformation.
This year, small organizations redefined growth and unleashed innovation by adopting AI-first operating models, fostering cultures of experimentation, and leveraging flexible talent pools. Next year, business leaders of all sizes can use this playbook to help them reimagine lasting growth in an era of constant change. Those who adopt these models now will define the next era of resilient, AI-driven growth.
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