A quarter of waiting
Challenger, Gray & Christmas reported 43,281 job cuts in September 2026, the lowest September total since 2022. Third quarter cuts totalled 129,591, down 43% from the second quarter and 36% below the same quarter last year.
The firm described employers as being in a wait and see period, citing high energy costs, the uncertain war in Iran, interest rate pressure and rising healthcare costs. Cuts slowed because decisions were deferred, not because confidence returned.
AI is the stated reason, not always the real one
AI was cited in roughly 120,000 job cuts year to date, about 21% of the total, making it the single most cited reason in 2026.
That figure deserves scrutiny. A Resume.org survey found that nearly 6 in 10 companies admit they frame cuts as AI driven when the real driver is financial. AI has become a more acceptable public explanation than a weak balance sheet, which means the reported numbers overstate how much of this is genuine technological displacement.
For people leaders the distinction matters. If roles were cut for financial reasons and labelled as AI, the organization now carries a story its own workforce does not believe, and a capability plan built on a premise that was never true.
Caution is a planning signal, not a pause
Hiring plans are running ahead of 2025, yet the usual seasonal surge is muted. Slower layoffs paired with weak hiring do not describe a healthy market. They describe a frozen one.
The risk for people leaders is reading stillness as stability. Capability gaps, manager strain and retention risk do not pause when hiring does. They accumulate quietly and surface the moment the market moves again, usually at the point when you most need people to be ready.
Where to put people strategy now
Gallup's 2026 workplace research found that manager support is the single strongest predictor of whether AI adoption improves engagement, lifting it from 30% to 48%. The same finding points to where the return sits in a cautious market.
In a wait and see period the highest return people investments are the low cost, durable ones:
- Manager capability. The largest single lever in the data, and the one that keeps paying in any market condition.
- Role clarity. Cheap to fix while the organization is still, expensive to fix while it is moving.
- Internal mobility. Fills capability gaps without external hiring, and holds the people you would otherwise lose.
These protect and strengthen the workforce while the economy decides its direction. The organizations that use a slow quarter to build capability are ready to move when others are still deciding.
About FT Consulting Partners
FT Consulting Partners is a practitioner-led consulting firm. We partner with CHROs, CEOs and senior leaders on workforce and people transformation, change management and AI integration, built by people who have led transformation from inside organizations rather than advised from the outside.