Business Leaders Grapple with Uncertainty in a Changing Landscape
KPMG’s CEO Outlook survey provides an annual glimpse into the concerns of top business leaders. This year, 400 executives participated in the 2025 edition, offering insights into the challenges they face. According to Timothy Walsh, KPMG’s newly appointed chair and CEO, these leaders are dealing with a high level of uncertainty across various aspects of their operations.
Walsh noted that there is a general consensus among C-suite executives about the current state of business. “There’s this general conversation around business uncertainty,” he said, expressing encouragement that there is alignment on key topics being discussed.
One of the primary concerns for business leaders is the impact of tariffs. An overwhelming majority—89%—believe that tariffs will significantly affect their business performance and operations over the next three years. Nearly as many, 86%, indicated that their companies will increase prices as needed. To mitigate these effects, 85% of CEOs said they are working to shift their sourcing strategies. Additionally, 79% have adapted their growth plans to address the uncertain environment.
Cybersecurity and Quantum Threats
Another major concern for CEOs is the evolving landscape of cybersecurity, particularly with the advancement of quantum computing. Walsh highlighted that quantum computing could one day break all encryption, prompting companies to conduct full assessments to ensure they are not exposed. He warned that this is a “massive effort” to prepare for potential threats.
In addition to quantum risks, AI agents are also raising concerns. Walsh mentioned that these technologies can be used for malicious purposes, such as malware and deepfake-type technologies. Over the next three years, 82% of CEOs believe cybercrime and cyber insecurity will be a top trend that could harm their organizations. Cyber risk was cited as the second-highest pressure behind short-term decisions, with fraud detection and prevention (65%) and identity theft (52%) being the main concerns.
Despite these challenges, Walsh remains optimistic. He pointed out that the economy has been surprisingly strong, and the tech sector is driving a robust stock market. Additionally, he noted that large deals and transactions are emerging in the M&A space, indicating that capital flows are becoming more liquid.
Tariffs and AI: A Dual Challenge
Tariffs remain the top concern for CEOs, but it’s not just the existence of tariffs that worries them—it’s the uncertainty surrounding potential changes. Walsh emphasized that businesses must be agile enough to adapt their supply chains to handle future uncertainties. In fact, 34% of CEOs identified supply chain resilience as the top pressure driving short-term decisions.
Walsh also highlighted the role of AI in addressing these challenges. He noted that AI is not just about efficiency but also about innovation. “AI is not just an efficiency play, CEOs are focused on innovating their business models and introducing new revenue streams and products,” he said.
The AI Workforce Shift
The rapid development of AI capabilities is prompting companies to restructure their teams. Walsh mentioned that the survey found CEOs mostly see an hourglass shape in their organizations over the next three years. This typical pattern with new technology deployment indicates a shift in workforce structure.
According to the survey, 35% of CEOs plan for workforce reductions in some areas due to AI, while 69% see an hourglass structure with more senior leaders and early-career workers and fewer in the middle. Managers are facing new responsibilities, including overseeing teams that integrate AI agents. Walsh noted that managers must ensure these agents complete steps in the workflow process, have good data inputs, and continuously review outputs.
The Importance of Human Skills
Despite the integration of AI, Walsh stressed the importance of human skills. He emphasized that even with AI implementation, reviewing AI outputs is necessary. “Human skills are critically important,” he said. While KPMG invests in upskilling its workforce on AI, Walsh reminded leaders that human-to-human relationships are essential both internally and externally.
Trust is at a premium in this uncertain climate. The top change that CEOs foresee is retaining and re-training high-potential talent (75%), followed by redesigning roles to reflect AI collaboration (65%) and hiring AI-capable talent (64%).
