KPMG's 2026 US CEO Outlook, a survey of 400 CEOs of large US companies, shows executives adding AI skills while trimming elsewhere. Fortune's Nick Lichtenberg discussed the results on October 15 with Tim Walsh, KPMG US chair and CEO.
Workforce plans
Over a two- to five-year outlook, 53% of CEOs are planning reductions in some areas, up from 35% a year earlier. Eighty-six percent are redesigning roles, career paths and team structures for human and AI collaboration, up from 65%. Eighty-three percent are retaining and retraining high-potential talent, up from 75%, and 79% are hiring people with AI and tech skills, up from 64%. Despite the cuts, 89% expect headcount growth over three years; of those, 60% expect growth below 5%, 26% expect 6% to 10% and 2% expect 11% to 25%.
Cyber and AI risk
Eighty-five percent say cybercrime and cyber insecurity will affect their prosperity within three years, more than inflation, geopolitics or the pace of technology change. Forty-eight percent are increasing cyber investment, the highest share for any risk, and 56% named cybersecurity as a challenge in rolling out AI, ahead of ethics, data readiness and cost. Spending drivers include AI-powered social engineering and targeted attacks (78%), AI-assisted malware or phishing (76%) and data and privacy risks from deploying AI agents (73%). On quantum, 62% know the risks to encryption but do not yet prioritize them and 4% have plans.
What Walsh said
Walsh said: “I don't think AI is Y2K,” and: “Something's happening and it's really, really big.” He added that he thinks model makers “are already starting to pace the model deployment because of safety concerns.” On jobs, he said: “What we don't see is the elimination of full bodies out of the delivery at this point yet.” On rollout, he said: “We can't just deploy this same technology across 50,000 people.”
KPMG's own approach
KPMG has about 50,000 US employees and is training existing staff rather than buying all its AI talent. AI agents are built into its Clara audit platform and Digital Gateway tax and advisory platform, and it launched an incubator outside the main firm called client technology and innovation. Walsh spent two days meeting frontier model developers on the West Coast.
Source: Fortune. This is an AI Business Watch summary of the original report.