The 5 Biggest Business Shifts of 2025

The recession everyone predicted at the beginning of the year never materialized. Then again, neither did the broad gains—in returns or productivity—AI was supposed to deliver.  

Just as in each of the past few years, seismic shifts characterized the business landscape in 2025. No, it wasn’t “shut down operations and send everyone home” change, like that of the pandemic. But some of the developments blossomed from seeds that were planted back then. Others, however, took shape as the year unfolded, and the headlines they produced were searing—from the announcement of tariffs to a stock market rattled by AI to quirky workplace trends like “job hugging.” Whatever leaders faced, they needed to make big decisions—and fast.  “Major changes and shifts are coming faster and faster,” says Tamara Rodman, a senior client partner in the Culture, Change, and Communications practice at Korn Ferry. 

Here’s what our experts will remember from 2025.

We moved from AI to AI agents.

Using AI to standardize marketing materials or draft client proposals is so 2023. This year marked the beginning of the agentic AI era in business— as celebrities from Matthew McConaughey to Idris Elba to Billy Idol reminded us. AI agents not only can return information, but can also make decisions, perform work tasks, and even fill roles. To be sure, this year saw companies move AI agents from pilots to scaled deployment, doing real work across tasks and teams, says Todd Blaskowitz, a senior client partner in the AI Strategy and Transformation practice at Korn Ferry. Agentic AI is already an $8 billion market, and it’s expected to grow to about $48 billion by 2030. “This was the year AI stopped being a tool and started becoming a teammate,” says Blaskowitz. 

Supply chains still matter.

The pandemic underscored the importance of supply chains, in part by exposing their vulnerability to disruption. In the immediate aftermath, firms worked diligently to shore up supply chains, and moved on. Then came April 2025, and the announcement of major tariffs. The turmoil came in waves as the year progressed, making supply chains a strategic priority again, says Meredith Moot, a senior client partner in Korn Ferry’s Global Industrial practice. “Tariff uncertainty reminded leaders that supply chains need constant optimizing and refining,” she says. 

The office wins out.

The long-simmering battle between in-office and remote work appeared to produce a definitive winner—and it wasn’t work-from-home or even hybrid employees. More and more prominent leaders demanded employees return to the office full-time—or not at all. And they got their way: About 33% of all US firms, and a quarter of Fortune 500 companies—nearly twice as many as in 2024—now require full-time office attendance. To be sure, both the threat of AI and the troubled labor market helped change the game. “Companies had the leverage,” said Rodman.

‘Job hugging’ and ‘unicorns’ become a thing.

With the average time to fill a job climbing to 58 days—a 35% increase over last year—it’s small wonder that people stayed in their jobs, whether they liked them or not. The term “job hugging” soon began making major headlines. Meanwhile, reports and surveys are showing that roughly one-third of open jobs this year weren’t actually filled. Some of the many reasons: AI overwhelmed recruiters with candidates; companies frequently posted “ghost jobs”; and, says Korn Ferry’s JP Sniffen, companies now “only want to hire unicorns.” To be sure, amid slowing growth, cost-cutting, and AI, firms would rather leave a position vacant than hire someone who isn’t a superstar. But Sniffen says that approach could backfire. “There’s a skilled-labor shortage,” he says. “Firms aren’t developing enough talent or doing anything else to get ahead of that.” 

Managers: An endangered species?

They bore the brunt of layoffs in 2025. The ones that survived took on most of the workload of those who didn’t. They had to tell employees to return to work, and they had to take responsibility for those who didn’t. One of the major themes to emerge this year, and one that is likely to resonate for years to come, is that managers are at risk of becoming endangered. What with the stress of the role, the threat AI poses to it, and the fact that younger talent isn’t being trained to be managers—and doesn’t want to be—the future of the role looks bleak, say experts. “Managers are being devalued, or at least perceived to be devalued,” says Korn Ferry senior client partner Benjamin Frost. He says that this kind of short-term thinking is a long-term problem in the making. “There’s no development pipeline, so where are the senior leaders of the future coming from?” 

Learn more about Korn Ferry’s Organization Strategy capabilities.

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