Companies are increasingly using artificial intelligence to automate workplace tasks and improve productivity. At the same time, some business leaders warn that the shift could create new challenges for entry-level professionals.
Rising Unemployment For New Graduates
ServiceNow CEO Bill McDermott recently noted that AI-driven productivity increases could push unemployment rates among new college graduates into the mid-30% range over the next few years. “So much of the work is going to be done by agents,” McDermott stated during a discussion on CNBC’s “Squawk on the Street,” suggesting that young professionals may find it increasingly difficult to differentiate themselves in a competitive corporate environment.
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Historic Shifts In Labor Markets
Data from the Federal Reserve Bank of New York show unemployment among recent college graduates at about 5.7%. The underemployment rate has reached 42.5%, the highest level since 2020. The figures reflect broader changes in hiring trends as companies invest in automation and digital tools designed to improve efficiency.
Corporate Strategy Amid Technological Disruption
Recent strategic moves by industry leaders underscore this shift. For instance, Block has announced plans to reduce its workforce by nearly 50% as automation takes over many traditional roles. Similarly, software company Atlassian recently confirmed it would trim approximately 10% of its employees to bolster investments in AI, a decision that has already affected its market performance.
Looking To The Future
Prominent CEOs are positioning their firms for a future dominated by intelligent automation. Palantir CEO Alex Karp has expressed ambitions to multiply revenue tenfold while simultaneously downsizing, and Amazon CEO Andy Jassy confirmed plans to reduce corporate headcount as AI tools become more ingrained in business processes.
Balancing Cost Reduction With Growth
McDermott said ServiceNow has used AI tools to automate many customer service functions previously handled by employees. According to him, AI systems now perform about 90% of those tasks. Executives say the adoption of AI tools can reduce hiring needs while allowing companies to maintain or increase productivity. Companies across multiple industries are continuing to evaluate how automation and AI systems affect workforce planning.
