Entry-level workers are now competing with AI for jobs — and technology is winning.
Recent college graduates are in one of the toughest job markets in recent memory as AI reshapes the workforce. Many employers are using AI tools to automate processes, streamline operations, and cut costs, which in many cases eliminates the need for entry-level workers.
This, in turn, negatively impacts the traditional career advancement ladder. “How in the world are young people going to get trained up to come in at a ‘Level Three’ if they haven’t done Level One and Level Two?” said Molly Kinder, a senior fellow at the Brookings Institution.
The bad news and the good
Employers are more pessimistic about the overall job market for upcoming graduates, projecting only a 1.6% increase in hiring for the class of 2026 compared to this year’s class, according to a new report by the National Association of Colleges and Employers (NACE). Some 51% of employers ranked the job market for this year’s college seniors as poor or fair.
The news isn’t all bad, though; the NACE found that employers who are increasing hiring are doing so because of their commitment to succession planning and the importance of their talent pipelines, as well as company growth.
“This is a strong indication they are not giving up on professional entry-level hiring or recent college graduates, and they are focused on the future of their organizations,’’ the NACE said.
Earlier this year, Anthropic CEO Dario Amodei urged the US government and AI industry leaders to begin preparing for a possible surge in entry-level unemployment that could reach 20% due to automation.
Software, clerical, and customer service jobs hit hardest
Other research further proves this theory. Stanford University’s recent “Canaries in the Coal Mine” paper found “declines in employment concentrated among 22-25 year-old workers in AI-exposed jobs such as software development, customer service, and clerical work.” And, Bharat Chandar, a postdoctoral fellow at Stanford’s Digital Economy Lab who co-authored the paper, wrote in a recent blog post that “AI may have contributed a meaningful amount to the overall slowdown in hiring for entry-level workers.”
Four out of five industries that generally hire the largest number of graduates have seen sharp declines in demand for entry-level roles, more so than non-entry-level positions, according to labor research firm Revelio Labs. “While AI certainly does not explain the whole decline in entry-level demand, we are seeing that highly AI-exposed entry-level roles have seen the largest decline,’’ the firm’s chief economist, Lisa Simon, wrote.
How to stay relevant
The best thing young workers can do is look for jobs at small companies and startups, billionaire entrepreneur Mark Cuban advised recently.
Upskilling is critical, especially for recent graduates. Even if they don’t work in tech, they can make themselves more marketable by learning AI platforms — especially since not all employers are willing to train them.
Recent reporting on AI-driven job cuts pushing 2025 layoffs past one million examines how automation and agentic tools are reshaping corporate headcount.