Three months ago, top CEOs were feeling good about the economy. Now they're drawing up layoff plans.
The Conference Board's quarterly survey of 141 CEOs just flipped from optimistic to pessimistic in a single quarter, with the score dropping from 59 to 47. Anything under 50 means the pessimists outnumber the optimists.
Those CEOs run major U.S. companies, and their planning windows typically shape hiring and capital spending six months out.
CEO Confidence Just Snapped
Last quarter, 39% of CEOs said the economy was in better shape than six months earlier. This quarter, only 15% do, while the share who think it's worse jumped from 8% to 47%.
The forward outlook flipped just as hard. 40% of CEOs now expect things to get worse over the next six months - last quarter, that number was just 13%.
"CEOs reported that the economy is materially worse now than it was six months ago," said Conference Board chief economist Dana Peterson, who also expects "conditions to weaken further" from here.
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From Hiring To Firing
The shift is already showing up in workforce plans. 31% of CEOs now plan to cut their workforce in the next six months, while only 28% plan to expand it.
That's a flip from the script of recent years, when hiring plans usually outpaced layoff plans. Planned raises are losing steam too, with most now landing in the 3% to 4% range.
Roger Ferguson, vice chairman of The Business Council, called it a "low-hire, low-fire" economy. The balance is starting to tip toward fire.
That tipping point matters because corporate hiring intentions usually lead actual payroll changes by a quarter or two.
What's Spooking The C-Suite
Cyber risk is now the top concern, with nearly two-thirds of CEOs ranking it among their biggest threats. Geopolitical conflict and AI both rank near the top.
Supply chain and energy risks climbed sharply this quarter, likely tied to the Middle East conflict, which economists say is adding pressure on inflation and incomes heading into the back half of the year.
The hard data is starting to back up the gloom. Q4 2025 GDP grew at just 0.5% annualized, short of the 0.7% economists expected.
What To Watch
The Conference Board is calling Q2 a "reversal." The bigger question is whether it's a one-quarter blip or the start of a trend.
If the next survey lands below 47, the layoff plans on paper start showing up in real job reports. CEOs don't usually telegraph cuts unless they mean it.
The next monthly jobs report and the Conference Board's next CEO survey will tell the story.
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