‘Employee distress driven by AI involvement in workplace’: Survey

Fear of AI-driven layoffs, worsening burnout, political stress and collapsing trust in employers are pushing workplace mental health concerns to unprecedented levels across the US workforce, according to a new report from Modern Health.

The workplace mental health platform surveyed 1,000 full-time employees at companies with more than 250 workers and found employees are increasingly overwhelmed by AI-related productivity pressure, economic uncertainty, political instability and always-on workplace cultures.

The report arrives amid growing global concern around workplace stress, AI disruption and employee wellbeing. Recent workforce studies from organisations including Gallup have also highlighted persistently high stress levels across the US and UK workforce, while Stress Awareness Month 2026 discussions focused heavily on AI-related job insecurity and burnout.

The findings suggest workplace mental health challenges are no longer isolated HR concerns. They are increasingly becoming operational, cultural and economic risks affecting retention, engagement, productivity and organisational trust as companies accelerate AI adoption faster than support systems can adapt.

Employees reported rising anxiety around job security and growing frustration with workplace expectations. Nearly 7 in 10 workers believe AI will lead to layoffs at their company within the next three years, while almost half fear personally losing their jobs to AI tools and automation.

The report found:

• 69% believe AI will lead to layoffs at their company within three years
• 49% fear personally losing their job to AI
• 24% say AI is already negatively affecting their mental health
• 67% say AI has increased productivity expectations
• Of those employees, 64% report increased stress directly tied to those expectations
• 72% believe employers prioritise productivity over employee wellbeing, up from 61% in 2025
• 58% say they trust AI chatbots more than HR for mental health support
• 84% say burnout is hurting productivity
• 72% felt pressured to work through mental health struggles
• 48% say work negatively affected their mental health over the past year

The report also revealed a growing breakdown in trust between employers and employees, despite many organisations expanding mental health benefits. While 76% of employees said they have adequate workplace mental health coverage, confidence in employer support continues to decline.

Only 33% strongly agree their employer values mental health, down sharply from 41% in 2025. At the same time:

• 50% avoid using mental health days out of fear of judgement
• 65% have hidden mental health struggles to avoid appearing weak
• 88% believe workplaces need cultures that actively encourage mental health support
• 89% say more workplace mental health support is needed

Senior managers appear particularly affected by workplace stigma and pressure:

• 61% avoid taking mental health days altogether out of fear
• 82% say being a manager is harder than ever
• 40% received a new mental health diagnosis in the past year, compared with 13% of non-managers
• Only 37% feel equipped to identify burnout in their teams
• 27% say their own mental health worsened compared to 2025
• 24% say their teams’ mental health worsened in 2026

Political instability and global crises are also increasingly affecting workplace wellbeing. The report found:

• 70% say the US political climate has made it harder to maintain positive mental health at work
• 52% cite war and terrorism as major workplace mental health stressors
• 50% say current events negatively affect workplace wellbeing
• 71% believe workplace mental health support can reduce politically driven anxiety
• 66% believe leadership has a responsibility to address social, political and cultural issues affecting employees
• Among Gen Z workers, that expectation rises to 72%

“We’re seeing an extraordinary collision of stressors across the US workforce – AI, economic pressure and global uncertainty – driving a level of strain that’s no longer sustainable, and it’s starting to show up in very visible ways,” said Alison Borland, Chief People and Strategy Officer, Modern Health.  “Simultaneously, expectations are rising and many employees don’t feel supported. That imbalance is manifesting in concerning levels of anxiety and unhealthy coping mechanisms.”

“Although we can’t identify ongoing patterns of use from these data, it’s concerning to see so many respondents report using alcohol or drugs to cope with stress,” said Dr. Jessica Watrous,  Chief Clinical Officer, Modern Health. “Research has demonstrated that why you drink – perhaps to counter negative emotions – can be a risk factor for long-term problems. When a majority of employees report turning to substances to manage stress, it points to a gap in how people are accessing support and building healthier coping strategies.”

The report urges employers to move beyond performative wellbeing initiatives and build workplace cultures employees genuinely trust. Experts recommend organisations normalise mental health conversations through leadership, train managers to handle emotional strain, reduce always-on work expectations and implement AI rollouts with greater transparency around retraining, workload expectations and job security.

As AI transformation accelerates and workplace pressures continue rising, the report warns that companies failing to address burnout, distrust and employee anxiety could face growing risks around retention, productivity, engagement and long-term organisational stability.