Artificial Intelligence (AI) is significantly impacting the job market for new graduates , with the tech sector taking the worst hit. According to a recent report by VC firm SignalFire, job openings for new graduates at the 15 tech largest companies have been cut by over 50 per cent since 2019. The report also stated that before the pandemic, new graduates made up 15 per cent of Big Tech hires, now, that number has dropped to just 7 per cent.
This shift can be attributed to companies using AI to automate junior-level tasks and giving them an incentive to delay or reduce early-career hiring. However, experts warn that while this may cut costs in the short term, it could weaken the leadership pipeline in the years ahead, Fortune reported.
The disappearing entry-level job market
Kenneth Kang, a computer science graduate, spent his first year after college applying for more than 2,500 jobs, out of which he only got 10 interviews.
“It was very devastating,” he told Fortune. “Honestly, I thought that having a 3.98 GPA, getting recognition letters, and having an interesting experience in the past, perhaps I could get a full-time job offer easily. But that was not true.”
Kang eventually got an offer from Adidas, where he had interned the previous summer, after more than 10 months of endless job applications.
This instance shows that the traditional corporate career path, which once began from entry-level roles with on-the-job training is becoming less common. Companies are increasingly expecting new hires to arrive with skills and experience that were once taught on the job.
AI is fueling this trend by efficiently handling tasks typically performed by junior employees such as data cleaning, summarization, and basic quality assurance.
- Shrinking opportunities: Data from Handshake, a Gen Z-focused career platform, shows that entry-level job postings for traditional corporate roles dropped by about 15 per cent last year.
- Struggling interns: The number of internships converting to full-time offers is also at a five-year low. In 2023–24, only 62 per cent of interns received full-time offers, according to the National Association of Colleges and Employers. Hybrid interns converted at even lower rates than those who were in person.
Is this trend beneficial for companies in the long run?
While companies may benefit from short-term cost savings by reducing entry-level hiring, experts warn that this could lead to a significant skills gap in the future as after some point, the companies run out of experts.
“If a lot of firms are cutting, cutting, cutting at the entry level, there’s a fear that they might actually miss out on the talent that’s going to create their pipeline going forward, that’s going to become the managers, executives, etc.,” Tristan L. Botelho, associate professor of organizational behavior at Yale School of Management, told Fortune.
Stella Pachidi, a senior lecturer in technology and work at King’s Business School mirrored Botelho’s thoughts by stating, “Everyone is just focused on the current efficiencies and not necessarily thinking further about the future.”
The impact of education and students
The rise of AI is also influencing academia, as both professors and students have realized that the majority of work performed in some university courses can be assisted, if not nearly totally automated, by AI.
Students were some of the first to realize that ChatGPT is capable of writing essays and summarizing long texts. But while AI tools may help students to lighten their academic load, professors told Fortune they were worried about the prospect of a generation lacking critical skills and traditional education.
Forture said citing a study from MIT that LLM (large language model) use can reduce neural engagement and harm learning among students, especially younger users. The study also found that ChatGPT users had the lowest brain engagement and “consistently underperformed at neural, linguistic, and behavioral levels.”
