Layoffs across the tech sector remain elevated, but the expected collapse in office demand tied to AI-driven job cuts hasn't materialized. Instead, JLL's latest earnings point to a different reality: AI is helping fuel leasing activity, particularly in major U.S. markets.
In the first quarter of 2026, companies announced 81,747 layoffs, the third-highest quarterly total since 2020 and rivaling the peak cuts seen in late 2022 and early 2023. Even so, the number of companies making cuts dropped sharply to 86, far below the hundreds per quarter recorded from mid-2022 through early 2024.
That disconnect is showing up in leasing performance. According to JLL's Q1 2026 earnings results, its Leasing Advisory practice grew 16%, "led by the U.S. with continued momentum in office and an acceleration in industrial," the company said. Office leasing outpaced broader market activity, with global revenue up 12% even as market volumes declined 1%. In the U.S., revenue rose 14%, while market volumes increased 7%.
Executives say concerns that AI would reduce the need for office space — and brokers — have yet to play out.
"For now, we are not concerned about any potential disintermediation. In fact, for now, we are very clear that AI is a tailwind for our organization," CEO Christian Ulbrich said during the April 30 earnings call. He pointed in part to JLL's "very rich data platform," which allows the firm to analyze proprietary data and better advise clients.
CFO Kelly Howe said AI-related growth is actively driving leasing demand, particularly in major coastal markets.
"Ironically, I would argue that the AI boom has also been a boom for our leasing business as the ecosystems around all of the AI start-ups, AI and I would say, financial services has really caused an uptick in activity, particularly on the coast, San Francisco, New York," Howe said.
"And so, at this point in time, we're really not seeing an impact on our business from kind of what people are thinking about in terms of AI concerns, headcount, employment, et cetera."
That demand is translating into larger deals and more transactions, especially in gateway markets. Much of the activity is coming from AI firms and financial services companies "looking for space to get their people together," Howe said.
Still, the recovery remains uneven. Demand is concentrating in top-tier buildings, particularly those with strong sustainability credentials. In New York, direct asking rents average $85 per square foot, but low-carbon trophy buildings command a 94% premium, reaching $164.
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