Recently news outlets reported that layoff announcements have reached pandemic levels, which is highly concerning, but certainly not unforeseen. At the beginning of 2025, the World Economic Forum reported that 41% of organizations were planning to trim their workforces in the face of rapidly advancing AI. In the second half of the year, six in 10 business leaders were planning headcount reductions. But while trimming headcount cost may have been the most publicized strategy for surviving macroeconomic volatility, it wasn’t the only one.
The Upwork Research Institute has identified a segment of companies that is maneuvering differently, poised to overtake enterprise organizations in innovation and resilience in 2026.
Our research found that small- to medium-sized businesses, or SMBs, employing between 10 and 499 people, largely avoided the large-scale layoffs that dominated headlines. Instead, they used AI to change the scale equation, applied experimentation, and invested in flexible talent to address the disruption surrounding them. And they’ve come out as stronger powerhouses of innovation as a result. In fact, nearly half of SMB leaders maintained high confidence throughout 2025’s economic shocks – underscoring that their approach wasn’t just different, it was more resilient.
In order to drive sustained growth in a turbulent world, more companies will need to start thinking “small” in 2026 – moving away from viewing talent as a large cost to manage and toward unlocking the multiplier effect of people and AI. Based on what worked for high-performing SMBs this year, here is the 2026 playbook leaders should follow to drive durable growth:
Leverage AI as a force multiplier, not a replacement
In 2026, more companies will move beyond AI adoption to fully enable AI workflows. For example, marketing teams will use generative AI to draft campaigns, while humans review for brand voice and creative iterations. Or an AI agent might triage procurement approvals, freeing finance teams to focus on strategy– a realistic scenario, since the number of SMB leaders planning to pursue AI agent expansion increased by 12 percentage points this year. The bottom line: AI will enable teams to do more, without necessarily bringing on more people.
Tap into the power of experimentation
If anything is certain, it’s that nothing is certain. Business leaders may not be able to predict what comes next in a volatile macroenvironment, but they can embody and cultivate the mindset that allows for success in any event. Whether it’s running rapid AI pilot projects, testing new customer experience models, or redesigning team structures, the strongest leaders will adapt through continuous and measurable experimentation– and learn from, rather than avoid, what isn’t working. Smaller organizations have the edge here. They can pivot faster, bringing their people along using change management best practices that take their larger peers months to execute. This approach allows businesses to anticipate and effectively meet the needs of a changing market as well, as 60% of SMBs that have embedded experimentation into their culture report they drove “excellent” customer satisfaction outcomes in 2025.
Think differently about people
In 2026, the “hire more people” mindset will shift to one of “access the right people when and how you need them.” This will become especially critical as AI infuses every part of organizational functioning– while these tools provide a path to scale, they can’t work alone, and having the right people in place to unlock their value will be key. With budgets continuing to tighten in 2026, blended teams will present an effective solution: FTEs uphold a strong institutional knowledge base and external talent gives business leaders access to specialized skills (think AI coding, data science) that are unavailable in-house.
Rising costs and growing pressures are today’s reality. And so is change. Beyond anticipated layoffs, the World Economic Forum predicts that while 92 million jobs globally will be displaced by 2030, 170 million new ones will be created. Cutting costs may improve the balance sheet in the short term, but is ineffective at creating sustained, long-term value, and leading the workforce change that is coming next.
This year, small organizations reshaped the definition of growth, unlocking innovation by embracing AI-first operating models, fostering cultures of experimentation, and leveraging flexible talent pools. In the coming year, business leaders of all sizes have the opportunity to take a page from this playbook– and reimagine enduring growth in our era of constant change. Those who embrace these models now will define the next era of resilient, AI-driven growth.
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