Graduates entering the workforce face an array of challenges at the best of times, but with the generative AI boom continuing, the technology poses an even bigger threat.
SignalFire’s 2025 State of Talent report found hiring trends point toward a reduction in tech companies hiring recent college grads across 2024 – significantly less than in the year prior.
That’s not to suggest they’re just not interested in bringing on new staff, however, as many are now focusing on hiring more experienced professionals across a range of areas. But SignalFire said a confluence of budgetary constraints and growing AI capabilities means they’re overlooking those entering the workforce.
“As budgets tighten and AI capabilities increase, companies are reducing their investment in new grad opportunities,” the VC firm said. Citing data from the Federal Reserve Bank of New York, the company noted that the unemployment rate for new college graduates has surged 30% since September 2022.
Simply put, young graduates entering the workforce now face a double whammy of challenging macroeconomic conditions and the fact that employers are trying to automate roles their predecessors walked into less than a decade ago.
SignalFire isn’t the first to highlight the threat AI poses to entry-level jobs. Indeed, LinkedIn’s chief economic opportunity officer, Aneesh Raman, voiced concerns about this trend in a recent op-ed for the New York Times.
Raman noted that the current paradigm shift in the labor market bears similarities to the sharp decline in manufacturing jobs witnessed in the US during the 1980s.
“Now it is our office workers who are staring down the same kind of technological and economic disruption,” he wrote. Raman added that the “bottom rung of the career ladder” will be among the first to be impacted by this rapid shift.
Dario Amodei says the quiet part out loud
The messaging from big tech figures on the topic of AI job losses – or the lack of jobs due to the adoption of the technology – has been a mixed bag in recent months.
Some, like Mark Zuckerberg, have gone so far as to suggest that certain roles will be rendered obsolete entirely – particularly entry-level software engineering roles, for example.
Devs entering the workforce now face an environment where AI coding tools are capable of carrying out simple tasks they typically would’ve been assigned during the early stages of their careers.
Very few tech leaders have articulated exactly what will happen to the labor market if AI continues to take jobs. Instead, they choose to promote the technology as a way to enable workers to focus on the more ‘rewarding’ and ‘valuable’ aspects of their roles.
Exactly what this entails for the majority of workers is still unclear. Previous research on this looking at software development showed those using AI tools shifted their attention to other tasks.
But that’s just one specific industry example – the influx of AI is occurring across a range of industries and professions.
Some big tech figures have taken a more upfront approach to the topic. Anthropic CEO Dario Amodei, for example, recently told Axios that he too believes AI will heavily impact white collar entry-level roles – nearly half, he warned.
Amodei told the publication that both AI providers and the government alike need to stop “sugar-coating” the inevitable wave of job losses across a wide array of industries.
“We, as the producers of this technology, have a duty and an obligation to be honest about what is coming,” he told Axios. “I don’t think this is on people’s radar.”
“It’s a very strange set of dynamics where we’re saying ‘you should be worried about where the technology we’re building is going’.”
Amodei noted that skeptics naturally push back on this, largely due to the fact they think it’s a marketing ploy from providers that have a vested interest in hyping up their own solutions.
Notably, Amodei’s comments came the week after the company unveiled new iterations of its Claude AI model range. These powerful new models have been touted as a game changer for developers and represent a vast improvement on previous versions.
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