TECH SECTOR
PREDICTIONS FOR 2026
2025 PREDICTIONS RECAP
We’ll See Immigration Pressure Intensify Across Every Program Tech relies on global talent, and 2026 will be the hardest year in a decade to navigate immigration. H-1B denials and RFEs will rise as agencies apply wage-tier scrutiny more aggressively. PERM and foreign-labor audits will expand, with DOJ probing PERM bias despite statutory limits. The $100K H-1B fee litigation will become a defining issue; a ruling could reshape the economics of sponsoring talent. I-9 and ICE audits will increase, especially around remote-worker verification. Expect AI-Driven Layoffs and Workforce Reshaping GenAI and agentic automation will continue eliminating or reshaping entire categories of technical roles – QA, low-level engineering, support, documentation, and some DevOps workflows. The result won’t be a collapse in hiring but a significant shift in required skill sets, with employers prioritizing systems integrators, AI-toolchain specialists, and engineers capable of managing hybrid human-AI systems. The Talent Wars Won’t End – They’ll Evolve Even with AI-driven layoffs, competition for top engineering, cloud, AI safety, and chip-design talent will intensify. Employers will respond in 2026 by strengthening trade-secret protections, tightening access controls, deploying enforceable restrictive covenants where permitted, and bolstering internal mobility and retention benefits. Equity and Compensation Strategy Will Become a Retention Imperative
The administration pushed for contractor-friendly policies as we predicted, and federal enforcement cooled – making IC models easier to justify in tech. But a warning: some states like CA, WA, and NJ continue to restrict contractor use, creating a mixed national patchwork. So while classification flexibility improved, remain on guard for strict state regimes. Increased Use of Independent Contractors We correctly predicted that the FTC would meaningfully pull back. Several high-profile tech mergers cleared with less drama, and agencies prioritized other sectors. This opened the door for more aggressive M&A activity, exactly as forecast, especially in AI tooling, chip design, and enterprise cloud ecosystems. Industry Enjoyed Reduced Antitrust Concerns We got this one correct – but didn’t expect as much turbulence as we saw in 2025. Visa uncertainty became a defining issue for the tech sector. The H-1B system overhaul, wage- tier shifts, and new fee structures, combined with litigation and agency scrutiny, disrupted workforce planning. Employers needed heavier support for visa holders and leaned into domestic upskilling and nearshoring, as predicted. There Was Trouble for Foreign Workforces
Stock programs and option grants will become core retention tools again. As VC markets stabilize and tech valuations rebound, employees will expect meaningful equity refreshes. Employers will reassess vesting schedules, refresher grants, clawbacks, and liquidity pathways. Companies that underinvest in equity strategy will lose talent before they realize it. Cyber Threats Will Escalate as Regulatory Pressure Tightens With rapid advances in AI-enabled hacking, deepfake fraud, and supply-chain breaches, cybersecurity will be a top-five board priority. Tech companies must prepare for stricter state privacy laws, AI-specific security expectations, more aggressive breach litigation, and heightened vendor-risk oversight.
Danielle H. Moore San Diego Executive Partner, Management Committee Co-Chair
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
Brett P. Owens Tampa Partner, Co-Chair
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