Big cities plan hiring, AI & expansion in 2026, surveys show

All right, buckle up — we’re taking a little business trip.

Specifically, we’re traveling to New York, San Francisco, and Los Angeles, where business leaders have been surveyed by consulting firm KPMG.

The surveys cover topics including hiring, artificial intelligence adoption, mergers and acquisitions and commercial real estate.

Our first stop is the Big Apple, which lost nearly 5,000 businesses over the past year, according to a report from the New York City Economic Development Corporation.

Despite navigating rapid AI integration and commercial real estate pressures, New York executives see themselves as key drivers of optimism across the five boroughs, with 66% planning to increase hiring in 2026.

Eighty-six percent of respondents said they are prioritizing talent with AI skills, yet 57% said they are simultaneously reducing entry-level positions because of AI and automation.

“We’re seeing a confidence gap that signals an undercurrent of uncertainty about what’s ahead,” said Yesenia Scheker-Izquierdo, KPMG’s New York City managing partner. “But that gap also creates opportunity. New York remains essential to the talent, businesses and innovation that drive global growth.”

NYC executives confident about growth

The survey found that 96% of respondents are confident in their company’s growth prospects for 2026, while confidence in the city’s growth prospects lags by 10 points.

In a vote of confidence in physical workplaces, 70% of New York business leaders plan to increase their commercial real estate footprint over the next 12 to 18 months, citing leasing costs, property taxes, sustainability goals, and the availability of flexible and shared workspaces.

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Nearly 90% of respondents said they believe agentic AI will have a fundamental impact on their organizations, and 80% said employees within the business — rather than HR or IT departments — will be responsible for managing AI agents.

Next, we head to San Francisco, where the recent Super Bowl generated a major economic boost for the city.

KPMG found that business leaders in San Francisco are confident in the city’s business climate and are pursuing growth driven by investments in AI, talent, and real estate.

Nearly 95% of San Francisco business leaders rate the city’s business climate as favorable for growth compared with other major metros, and 93% are confident in the city’s growth prospects for the year ahead.

“San Francisco’s business leaders are moving past the noise and making definitive moves toward executing on growth,” said Chris Cimino, KPMG’s San Francisco managing partner.

“What we’re seeing is a city that’s leveraging its inherent advantages and pairing that with aggressive AI integration, along with a renewed focus on the spaces and experiences that bring people together.”

San Francisco companies are poised to be among the nation’s most active in mergers and acquisitions in 2026, with 50% of business leaders saying they are likely to pursue acquisitions this year.

LA businesses increasing AI usage

Among those planning deals, 77% said they intend to act in the first half of the year, while 18% expect to pursue transactions in the second half.

Nearly all respondents said their company’s use of AI will increase in 2026, with 54% expecting significant increases. In addition, 91% said AI will be a top investment priority in 2026.

Related: Ernst & Young drops blunt reality check on the economy

We end our tour in Los Angeles, which has seen a sharp decline in film and television production over the past three years, according to The Hollywood Reporter.

Michelle Wroan, KPMG’s Los Angeles managing partner, said the city “is entering 2026 with real momentum.”

“What we’re seeing in Los Angeles is confidence backed by intention,” Wroan said. “Leaders are making strategic choices about talent, office space and deal activity that align with their long-term vision — not just the moment. It’s a more disciplined, forward-looking approach to growth.”

Ninety-six percent of respondents said they are confident in the growth of both their company and their industry, and 85% said they are confident in the city’s business growth in 2026.

Almost half of respondents said they expect to complete deals in the first half of 2026, while 39% expect to close deals in the second half of the year.

Ninety-eight percent of business leaders surveyed said their organization’s use of AI will increase this year, with more than half saying their AI usage will increase significantly. More than 90% said AI will be a top investment priority in 2026.

Almost three-quarters of respondents said they anticipate workforce reductions as AI scales, and more than half said entry-level hiring will decline because of AI.

Sixty-five percent of Los Angeles business leaders plan to increase their commercial real estate footprint in 2026, while 27% expect it to remain the same.

Related: Deal fever returns: 2026 looks hot for M&A