If AI can do the job, there are no more new employees.
That’s it Shopping CEO Tobi Lütke told staff in a memorandum earlier this year. And he is not alone.
Consulting giants McKinseythe entire company has deployed thousands of AI agents, often receiving tasks previously handled by junior workers. On “AI-First” Duolingo, CEO Luis von Ahn is using “AI Fluitency” to identify the people hiring and promoting in the company.
In the rest of the Fortune 500, companies are well integrated into their era of AI efficiency, which for many means more cuts and fewer hiring.
Some recent data suggests that AI is one of the biggest drivers of reducing the workforce, perhaps not surprising.
In the United States, in the first seven months of 2025, the generated AI adoption is directly related to more than 10,000 layoffs. New data from abdicated company challenger, grey and Christmas. The company now ranks AI among five reasons for the reduction in workforce this year.
Layouts are rising
According to Challenger, Gray and Christmas, layoffs are emerging rapidly in the U.S., with the company announcing more than 806,000 jobs announced so far in 2025, the highest number since 2020. The technology sector has hit the biggest hit, with more than 89,000 layoffs in the industry alone. The company found that since 2023, more than 27,000 technical efforts have been directly attributed to AI-driven redundancy as the company simplifies operations and restructuring departments.
At the same time, companies have more and more choices about who and where to hire. With technology becoming more and more adept at automation beginners, entry-level characters are feeling the worst of this impact. Many companies see easy cost-cutting opportunities at the entry level.
“When you graduate, when you first graduate, you are a knowledge-intensive job, you are collecting data, transcribing data and putting basic visualizations together, and learning the organization from scratch,” said Tristan L. Botelho, associate professor of organizational behavior at Yale University, told YALE School of Management. wealth. “AI can do this well, and I’ve heard many managers say, ‘We can reduce the number of entry levels.” …The biggest disruption is probably the disruption in these low-level employees, especially when the job is predictable, tech-savvy or more common. ”
According to handshake Z-focused career platforms, entry-level job releases, especially company roles, fell 15% year-on-year. Meanwhile, the number of employers citing “AI” in job descriptions has increased by 400% over the past two years.
Generation Z graduates feel squeezed
Nearly half of U.S. Gen Z job seekers say they believe artificial intelligence has lowered their degrees. Conduct a recent survey. New graduates are also facing a tighter job market; recent unemployment rates at universities Graduates are estimated to reach 6% of 12 As of the months before May, it was much higher than the country On average, about 4%.
Young workers in the tech industry feel the worst of the industry. The unemployment rate for the industry in the 20s to 30s has increased by about 3% since the beginning of the year. According to Joseph Briggs Goldman Sachs’ global senior economist.
“It’s much bigger than we’re seeing in the technology field or in other young workers,” Briggs said. comminicate Podcast this week.
In the short term, cutting at the entry-level may make sense for the company’s bottom line. However, organizations at entry-level recruitment may see this strategy backfire in the long run.
“If many companies cut, cut, cut, cut at the entry level, people are worried that they might actually miss the talent they will create, which will become managers, executives, etc,” Botelho said.
The job market is hitting the wall
Recent labor statistics have not helped long-term concerns about AI.
The U.S. labor market showed signs of a severe slowdown in July, while job growth and declines in the previous months were weaker. Economists attribute the booth to business uncertainty driven by continued changes in tariffs under President Trump, which has left companies hesitant to invest or hire.
In March, the unemployment rate for college-educated Americans aged 22 to 27 reached 5.8%, the highest level in four years, according to the Federal Reserve Bank of New York. For some, the numbers far above the national average confirm that AI Jobs Apocalypse is already on us.
However, the decline in entry-level job posting is happening along with the U.S. economic slowdown, making it difficult to separate AI from large market forces. For example, Oxford Economics estimates that the recent 85% rise in unemployment is due to the efforts of new labor market entrants to find jobs, not necessarily to eliminate jobs across the board.
Drive AI or not, the U.S. economy has suffered from generation to generation, as people who have just entered the workforce face higher barriers and fewer opportunities.
