CEO Confidence Cools: Uncertainty Derails Workforce Expansion, Adds to Burnout [Q2 Vistage CEO Index]

Depending on the source, the U.S. economy is either booming or on the brink of collapse. As always, reality lies somewhere in between.

During the rising tide decade of the 2010s, the Vistage CEO Confidence Index averaged 97.8, buoyed by strong growth and low interest rates. That momentum hit a wall with the pandemic. Confidence cratered to 65.5 in Q2 2020, the second-lowest in the Index’s 22-year history, as businesses struggled through shutdowns and supply chain chaos.

Fast forward to last December, when optimism around a new administration’s business-friendly posture triggered a short-lived spike that reversed in March. CEO confidence has once again edged lower in June, with the Q2 2025 Index reading at 77.2, down 1.3 points from last quarter and 3.2 points below the 12-quarter average. The numbers suggest a return to the lower end of the post-pandemic range, with caution prevailing.

Notably, the quarterly data does not reflect the full fallout from April’s tariff announcements. The monthly WSJ/Vistage Small Business CEO Confidence Index captured the low point of confidence in April, which has since rebounded.

Uncertainty’s impact on the workforce

One driver of the decline in overall confidence is workforce expansion, which is at a record low as CEOs assume a more risk-averse posture. Just 42% of CEOs expect to increase their workforce in the year ahead, down from 45% last quarter and 23 points from the recent peak last December. Equally troubling is that the percentage of CEOs who expect to decrease the size of their workforce has grown to double digits. While 13% may not seem like a significant proportion of small and mid-sized businesses planning to reduce their workforce, this is the first time these levels have been recorded outside of last quarter, the only other instances being during the pandemic and recession.

Uncertainty is taking its toll, resulting in plans to reduce workforce. CEOs who report reduced sales, poor revenue forecasts or shrinking backlogs are finding it financially unsustainable to maintain current staffing levels. Some CEOs are adjusting their workforces in response to industry-specific downturns, such as those in construction or manufacturing, while others describe a broad erosion of demand or a prolonged, slow recovery following the COVID-19 pandemic.

Others are beginning to realize productivity gains from AI, automation and technology in lieu of workers. They are streamlining processes, doing more with fewer people or eliminating roles that can be digitized. Some CEOs also mention offshoring and robotics as alternatives to people.

For those experiencing soft or declining revenues, CEOs cite the need to cut fixed expenses — especially payroll — due to compressed margins, inflation or cautious economic outlooks. These reductions are not always demand-driven, but preemptive measures to preserve profitability or survive turbulent market conditions.

Importance of protecting margins

The relentless uncertainty, now accompanied by predictable unpredictability, has made decision-making riskier than ever. Examining the components of the Confidence Index, forward-looking CEO optimism about the economy increased slightly from Q1 but remains a significant drag on the Index. Despite improvements from last quarter, 33% of CEOs believe the economy will worsen in the year ahead.

In turn, the uncertainty has led to waning profit and revenue expectations for the year ahead, with 54% of CEOs expecting increased revenues, down from 76% in Q4. Profit expectations declined 20 points in that same period, with only 41% of CEOs expecting increased profits in the next 12 months.

Fixed investment plans for the year ahead are expected to change little and remain slightly below the 3-year trend, but are 40 points below the average of the 2010s. Over a quarter (26%) of CEOs have reduced capital expenditures since the start of the year, compared to 15% who have increased them.

As Lauren Saidel-Baker explains, “Margins are the key thing to watch going forward … If you have efficiency gains that can be made, this is probably a good time to do them. Whatever you can do either with your labor force or with your existing capacity, at the end of the day, it really comes down to that margin equation.”

Rising costs impact pricing strategies

Across industries, rising costs are compressing margins. In analyzing open-ended responses from CEOs about key drivers for price increases, 45% identified rising costs for labor, materials and overhead as the most commonly cited reason for raising prices. For nearly a third of CEOs, tariffs and the long-term uncertainty of what’s next are pressuring pricing. This is closely aligned to those who are directly experiencing negative implications of tariffs in manufacturing and import-heavy sectors. Another 15% cited macroeconomic inflation — including CPI-indexed pricing, cost-of-living increases, and supply chain inflation — as justification for price hikes.

Due to intense customer price sensitivity and competitive pressures, these cost increases are not always recovered through price hikes alone. Despite this, 49% of CEOs plan to increase prices over the next three months. Many CEOs mention cash flow challenges from delayed receivables and uncertain revenue timing. Combined with stagnant or declining demand, maintaining profitability becomes increasingly difficult.

Despite the pause, tariffs take their toll on small and midsize businesses

Tariffs continue to impact the psyche and decision-making of most CEOs. A third are seeing a direct negative impact from tariffs today, with 36% experiencing indirect negative impacts. Just over a quarter of CEOs (26%) see no change, and only 5% see a positive effect.

Shifting trade agreements and tenuous geopolitical alliances conspire to make tariffs the leading challenge for all CEOs as their true impact begins to show on balance sheets and customers’ decision-making. Consumers have yet to feel the full impact of tariffs. When it does, depending on where and how they are implemented, they will have a significant economic effect on the trajectory of the second half of the year and the balance of the decade.

Top challenges of CEOs

Beyond tariff concerns, CEOs report high general economic and political instability. Many cite the lack of clear, consistent direction from the federal government, unpredictable interest rate policy and fears of inflation or recession. This uncertainty affects confidence in long-term planning, capital investments and customer behavior. Business leaders often describe being in a holding pattern, waiting for clarity on federal funding, regulatory shifts and macroeconomic indicators before making critical decisions.

Talent shortages and workforce issues are always a challenge. Finding, hiring and retaining skilled employees is critical in all economies. It’s estimated there are 400,000 manufacturing jobs available, but skilled and willing applicants are scarce. Frontline labor for construction, manufacturing and healthcare, as well as leadership and technical talent, is hard to find. The aging workforce, lack of interest in “the trades” by emerging workers and shifting workforce expectations for remote/hybrid work and culture further exacerbate the challenge.

Customers are experiencing the same uncertainty, which is resulting in a slowdown in demand. CEOs report that clients are delaying purchases, canceling or scaling back projects or being slow to make decisions — all of which contribute to extended sales cycles and reduced revenue visibility. Consumer confidence and business buyer confidence appear fragile, as many CEOs state their sales pipelines are stalling.

Aperture of uncertainty

When the pandemic first hit, 5 years ago, it broke a 10-year run of stability. CEOs had a somewhat consistent and predictable business environment in which to function and plan. The pandemic changed all that. In Q2 2020, the Vistage CEO Confidence Index dropped to 65.5, a 32.3-point decline from the pre-pandemic 10-year average of 97.8. Uncertainty and fear froze many CEOs as the specter of a sci-fi pathogen loomed. The Index whipsawed from that low to a peak 4 quarters later of 108.8, only to plunge again to 69.0 a year later. Over the ensuing three years, the Index has remained stable at the lower end of the range.

CEOs have been forced to open their aperture of uncertainty as they become more accustomed to rapid change, unpredictability and the uncertainty that comes with it. This has only accelerated over the last six months, as the new administration’s vacillating “on again–off again” tariffs and wavering economic policy changes have been reported in headlines and social media posts. Over time, it takes its toll on the workforce, customers and the CEOs themselves who are forced to shoulder the brunt of uncertainty while projecting a demeanor of calm and decisive leadership.

It’s no wonder that nearly 25% of CEOs reported experiencing feelings of burnout daily or frequently, with an additional 44% stating they occasionally feel overwhelmed.

Managing stress and burnout

In an analysis of open-ended responses about the causes of burnout, nearly 3 in 10 CEOs cited overwork and a lack of delegation. CEOs report being overwhelmed by long hours, taking on too many tasks, poor delegation and working “in” the business rather than “on” it. Many also mentioned being stretched thin due to insufficient support from leadership teams or being responsible for multiple roles.

It’s not going to get any easier or more predictable as we move through the midpoint of the decade. The volatility will continue, if not potentially increase, in the second half of the decade, with the apparition of 2030 looming on an ever-closer horizon. Airline flight attendants instruct us to put our own oxygen mask on first before assisting others in an emergency. For CEOs, that means making sure your mental, physical and emotional mindset is prepared for uncertainty to lead your business and workforce through the turmoil. Read the full Q2 2025 Vistage CEO Confidence Index report for more insights on strategies to avoid burnout as a leader.

To explore the full Vistage CEO Confidence Index survey dataset, view the infographic and visit our data center.

The Q2 2025 Vistage CEO Confidence Index survey was conducted between June 2 and 16, 2025, and captured input from 1,537 leaders who are active Vistage members of Chief Executive and Small Business groups in the United States.

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