It's Not (Only) About AI...

Today marks the end of Women’s History Month 2026 and it is going out as it started, with a whimper. Perhaps a whine. The month began with the kerfuffle over how our president honors gold medal winning ice hockey champions and now is ending with Sheryl Sandberg taking aim at the #tradwife movement. And then there is Louis Theroux’s gut curdling documentary, Inside the Manosphere - it’s a horror movie; I mean documentary.

Disturbing as this all is, these gendered culture wars are yet another distraction for leaders who may be missing a major issue poised to dramatically impact their businesses in just a few short years.

No, not AI.

I am talking about women, work, and the looming labor shortage.

Let’s Start with Women

We’ve been reading on and off about the She-cession since 2020 when 12.4 million women lost or left their jobs seemingly overnight because of the pandemic. Between 2021 and 2023, women were able to make a slow, grinding recovery and then finally in 2024, women's prime-age participation rate hit an all-time high of 78.4%. BOOM!

Any guess as to why? 

Before I answer, consider this: Did you know that in 2025, we faced another She-cession as an estimated 455,000 women left the workforce between January and August 2025 — the largest exodus, outside of the pandemic, since 1948.

Let’s Talk About Work

So what happened? ¹ Pretty obvious, but in case you aren’t completely sure…

1. RTO: In 2024, only 17% of companies mandated a return to office. This gave women with caregiving responsibilities the time mastery to do great work, contribute to the economy, and care for their families. 

   By 2025, that number jumped to nearly 40% of companies across the United States who are mandating their employees get up everyday, commute hours upon hours (because who can afford to live near their offices?!), while struggling to find back-up care when their child is sick or their parent is hospitalized. The result? Workforce participation of mothers with young children dropped significantly, falling from 69.7% to 66.9% between January and June 2025.

   According to a January 2026 report by Catalyst, 42% of the “voluntary” attrition by women was a result of “the lack of workplace support for employees’ caregiving responsibilities.” Women spoke with their feet and raced out of the workforce in protest. Meanwhile, in case you are wondering, men joined the labor force at three times the rate of women in 2025.

2. AI: Ok, yes, it is also about AI. Or rather, the decisions by leaders that are uniquely targeting women. In 2025, nearly 55,000 job cuts were directly attributed to AI by companies in their layoff announcements, out of a total 1.17 million layoffs — the highest level since the pandemic.

   Some examples include Workday where approximately 1,750 jobs where eliminated in order to reallocate resources toward AI. Amazon cut 14,000 corporate roles citing AI enabling leaner structures. Microsoft followed suit and cut about 15,000 jobs with AI central to its restructuring. Salesforce reduced its customer support workforce by 4,000, with CEO Marc Benioff stating AI now handles up to half of the company's work.

   Who is impacted most by all of these cuts? Well, the majority of these jobs were customer service or corporate roles like marketing or human resources; jobs where women predominate. According to World Data, 79% of employed U.S. women work in high-automation-risk jobs, compared to 58% of men. This reflects a labor market structure where the clerical, administrative, and customer service roles that AI is automating most aggressively are disproportionately held by women.

It’s not a She-cession, it’s a math formula: RTO + AI = axe on women’s employment opportunities.

Think of it this way: the same RTO mandates that drove 455,000 women out of the workforce in 2025 are now being layered on top of AI displacement risk that falls disproportionately on the women who stayed. Leaders who aren't actively thinking about this intersection are sleepwalking into a talent crisis.

Why? Because of….

The Demographic Drought

I recently saw a headline that said we’re heading to a “demographic drought” when it comes to labor in this country. Given the other headlines about all of the layoffs and the ongoing messaging about how hard it is to find work, I’m sure that you, like me, are wondering if there really is a looming labor crisis. In fact, there is.

I learned that the U.S. will face a severe, structural labor shortage projected to reach a shortfall of 4 to 6 million workers by the end of the decade.

My colleague, Cali Yost, CEO of Flex+Strategy Group, has been trying to get leaders to focus on this issue for years now. In her recent Now+Next newsletter she shared:

I asked Claude for some clarity on why this is happening. Here’s what they told me: 

• Worker Shortfall: The US needs to add 4.6 million workers annually to keep pace with current labor demand.

• The Math Gap: The looming, long-term labor shortage is driven by a massive demographic shift: between 2024 and 2032, 18.4 million experienced workers are expected to retire, while only 13.8 million younger workers with similar education levels will enter the labor market, creating a shortage of over 5 million workers.

• Declining Participation: The overall labor force participation rate experienced a high of 67% in 2000 and has since seen a dramatic fall down to 62.4% by late 2025. This means hundreds of thousands of workers - women and men - are “missing” from our economy. 

• Industry Gaps: Health care, construction, and transportation are facing the highest vacancy rates due to aging workers, while the clean energy sector projects a shortfall of over 1 million workers.

• Industry Impact: The shortage is most critical in sectors demanding high skill sets, including information security analysts, software development, and healthcare management.

• Skills Gap: A "structural mismatch" exists where young workers do not possess the specific technical or postsecondary skills required for in-demand roles.

• Immigration Reliance: With a shrinking native-born workforce, foreign-born workers are becoming crucial to filling vacancies, specifically in key health sectors.

• Prime-Age Male Decline: A decrease in labor force participation among men, driven by factors like addiction and incarceration, is aggravating the shortage. See, it’s not just women. Men are struggling too.

Now for Some Good News

This is a bit of an aside, but lest you are under the misguided impression that women just aren’t ambitious enough, let’s track what we ladies are actually doing. Yes, they are leaving Corporate America, but they aren’t becoming the #tradwives Sheryl Sandberg so deeply fears. Oh no! 

Did you know:

• Women started 49% of new U.S. businesses in 2025, up from 29% in 2019 - a nearly 69% increase!

• Women-owned businesses now represent 40.6% of all U.S. firms, employing 12.6 million people and generating $2.8 trillion in revenue, according to a recent Wells Fargo report.

• The U.S. Census Bureau reports that of those businesses, those that employed more than one worker delivered $2.4 trillion in revenue to the GDP. For solo entrepreneurs like myself, we added an additional $423 billion to the GDP. 

• Leading this trend are Black women. The Wells Fargo report noted that the number of Black women-owned businesses rose about 13% last year, more than for any other racial group of men or women.

No, we aren’t opting-out. We’re taking our talent and investing in ourselves.

So what’s a leader to do if they don’t want to lose the highly capable, educated, skilled talent they already have?

4 Ways To Keep Your Top Female Talent

1. Choose Her: The rate of women rising to CEO positions in the U.S. fell to 25.4% in 2025, the lowest level since 2020 (23%) and down from a peak of 28.7% in 2023. As leaders prepare their succession plans, they have a choice. They can look for the candidate that looks just like them or they can do as one of my CEO coaching clients has done. He is busy succession planning for his family-owned business. He has identified two candidates, both women, whom he thinks would be fantastic replacements for him. We’re working together to identify the potential gaps and mapping out a plan for implementation. When I asked why he had selected these two women to run his family’s business, he told me, “It’s past time to put women in charge. I want to be THAT guy who does it.” 

2. Sponsor Her: According to McKinsey’s 2025 Women in the Workplace Report  only 31% of women in entry-level positions have a sponsor, compared to 45% of men in similar positions. At senior levels, women are still less likely to enjoy any sort of sponsorship. This lack of sponsorship is important. Formalized sponsorship programs are highly effective, with studies showing that employees with formal sponsors are 48% more likely to believe their workplace offers equal opportunities for advancement. They increase retention, accelerate the promotion of high-potential talent by 19-23%, and provide a competitive advantage to organizations. According to McKinsey, 65% of workers with a sponsorship were promoted in the last two years. That is compared to only 35% of those that are not sponsored. In other words, make sure that the high-potential women are paired with leaders who can help them steer the corporate jungle.
   

3. Empower Her: Your 2019 expectations of the workplace do not work in 2026. Enough with the RTO! It’s not increasing productivity and, as we saw above, it’s hurting women. Flexible arrangements—including hybrid, remote, and flexible hours—boost loyalty, with nearly 80% of workers reporting higher loyalty and 47% of non-job seekers citing flexibility as a key reason they stay. At the very least, don’t make it a top-down mandate. If you really want your employees in the office then create intentional in-person collaborations. Make them want and need to be there. Empower your teams to reimagine and design their own “How, When, and Where” work model (See Flex Strategy Group’s website for more information on how you can make this happen). Have confidence that productivity, satisfaction, and retention increase when employees have “time mastery.” 

4. Invest In Her: McKinsey’s report noted that only 54% of companies surveyed identified women's career advancement as a high priority in 2025. This is a sharp decrease from previous years; for comparison, 87% of companies reported gender diversity as a high priority in 2019. Formal corporate sponsorship programs and women training programs have dropped by 13% in just the last year, mostly because of fear of political blowback and legal threats. Sure, you can be that leader and that company. You know, the performative ones that weren’t ever really committed to supporting women. The ones that women are leaving en masse. Or, you can hold your ground. Re-commit to creating workplaces that reflect the world at large, and attract the best and brightest talent based on their skills, talents, and abilities. The result? Engaged, high-performing employees who deliver those desired bottom line results. It’s up to you.

Do it now before it’s too late.

Lead On!

Lisen

Join Me To Explore What Is Essential

You’ve been with me as I sold my company, as I cared for my dying father, as I relaunched to this new incredibly rewarding role as an advisor to women-led start-ups and a coach to global CEOs. 

Now I invite you to come a bit closer. 

I’ve missed writing for the sheer joy of discovering what I feel, think, dream of through the written word. I’ve missed writing simply for the creativity of it all. So, I've decided to spend more time in that liminal space. 

I’ve launched a Substack, Essential with Lisen Stromberg. I’ll be exploring just that: what is essential for a life well-lived? Who and what do I take with me in this last third of my precious days on this glorious earth? And why?

I hope you’ll join me on that journey. Sign up for Essential with Lisen Stromberg here. It won’t cost you a thing, except for your most valuable gift - your time. 

P.S. Don’t worry! I promise I’ll continue the Modern Leader Letter to ensure you have the insights and tools to lead in these chaotic and complex times.

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I’m honored to serve as an Executive Leadership Coach for Harvard Business School’s Executive Education program. If you, too, would like to get the coaching you need to move from success to significance or would like to help your team to thrive, reach out to me here.

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