SMB CEO Confidence Slips Again in Q2 as Hiring Plans Stall, Burnout Grows, and AI Pressures Mount
If you’re running a small or midsize business in 2025, chances are you’re tightening your belt, pausing on new hires, and wondering if AI will help or hurt your bottom line. That’s the picture painted by the latest Vistage CEO Confidence Index, which dropped for the second consecutive quarter to 77.2, down from 78.5 in Q1 and well below the post-election spike of 100.8 in Q4 2024.
While the U.S. economy sends mixed signals—booming in some corners, cooling in others—SMB CEOs are increasingly cautious. Their outlook? A mix of risk-aversion, pricing hikes, hiring freezes, and a whole lot of personal fatigue.
“CEO confidence continued to slip in June, returning to the lower end of the post-pandemic range,” said Joe Galvin, chief research officer at Vistage. “With so much disruption, it’s no surprise that our survey reveals many CEOs are experiencing burnout.”
Hiring Plans Hit Record Lows—AI and Uncertainty to Blame
Just 42% of SMB CEOs expect to grow their workforce in the next 12 months—a record low in recent years and a dramatic drop from 65% in Q4 2024. Meanwhile, 13% are planning layoffs, a level seen only during the worst of COVID-19 or economic downturns.
The culprit? A mix of factors, but artificial intelligence stands out. As automation becomes more viable, SMB leaders are holding off on hiring, opting instead to squeeze more efficiency from existing teams.
“Efficiency is the new priority,” said Lauren Saidel-Baker, economist at ITR Economics. “Now is the time for business leaders to hyperfocus on margin protection and maximizing their current capacity.”
Inflation and Tariffs Push CEOs to Raise Prices
Nearly half (49%) of CEOs plan to raise prices in Q3, with 79% of those increases topping 4%, and 11% jumping beyond 10%. The drivers: rising labor costs, supply chain disruption, tariffs, and general inflation.
And those tariffs? Still biting. 69% of SMBs report negative impacts from trade policy shifts, with 44% of those ordering from China racing to move inventory during a temporary 90-day tariff pause.
Sales cycles are slowing as well: 46% report customer delays, and 32% say buyers are exploring more alternatives, introducing friction that SMBs can’t afford in a slowing economy.
Confidence in the Economy—and Their Own Businesses—is Fading
Only 17% of CEOs say economic conditions have improved over the past year, while 50% say they’ve worsened. Looking ahead, expectations remain mixed:
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33% expect conditions to deteriorate further in the next year
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32% expect no change
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Just 31% anticipate improvement
Optimism around individual business performance is also down. Just 54% expect sales growth in the next year, down 22 points since Q4, and only 41% expect profitability to rise, a 20-point drop.
Burnout Is the Silent Risk SMBs Can’t Ignore
It’s not just the numbers that are sagging—so are the people behind them. 68% of SMB CEOs report burnout or emotional exhaustion at least “occasionally,” with 21% feeling it “frequently.”
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40% rate their work-life balance as “fair” or “poor”
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32% don’t build in any regular mental recharge time
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Half say their schedule limits their ability to exercise, even though 83% believe movement helps decision-making and emotional resilience
The mental health of business leaders, often overlooked, is now becoming a strategic vulnerability.
What It All Means
The Q2 2025 report paints a picture of a nervous, overworked, and efficiency-obsessed SMB sector, grappling with long-term challenges that show no signs of quick resolution. From AI reshaping hiring strategies to geopolitics distorting supply chains, CEOs are learning that the post-pandemic normal might be a permanent state of controlled chaos.
What’s next? Don’t expect a hiring spree. Look for leaner operations, selective automation, pricing recalibrations, and wellness initiatives—if leaders can find the time.
If you’re a tech provider, HR strategist, or SaaS vendor, take note: the demand is shifting from “grow fast” to “grow smart”—and there’s real opportunity in helping SMBs optimize, stabilize, and humanize in this new era of cautious leadership.
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