AI May Push Recent College Grad Unemployment to Mid-30s

Artificial intelligence (AI) is poised to dramatically reshape the job market for young professionals, with rising automation potentially pushing unemployment among recent college graduates into the mid-30% range in the coming years. This threat has gained attention from industry leaders and regulatory bodies alike, sparking discussions on both practical solutions and ethical considerations.

Speaking at a CNBC segment titled “Squawk on the Street,” ServiceNow’s CEO Bill McDermott emphasized that AI automation is not just a future scenario; it’s an unfolding reality in many corporate environments. He warned of a concerning trend where many entry-level roles are being automated, leaving young graduates struggling to stand out amidst a sea of AI technologies performing foundational tasks.

“Many businesses are already adopting AI tools to boost productivity and reduce labor costs,” McDermott noted. “AI agents now handle basic business operations that used to require human intervention.” According to the Federal Reserve Bank of New York, recent graduates have faced an unemployment rate of 5.7% by the end of 2025, while underemployment rates hover around 42.5%, which is the highest since 2020.

The concerns are echoed across various sectors. Amazon’s CEO Andy Jassy has previously expressed that corporate workforces may shrink as AI tools improve capabilities, potentially leading to layoffs and restructuring efforts. Alex Karp from Palantir proposed a counterintuitive strategy: boosting revenue through operational efficiency improvements necessitating fewer employees.

Companies are aggressively adapting their operations by integrating AI technologies. For instance, Block—a payments company—has announced plans for workforce reductions due to automation taking over multiple responsibilities. Atlassian, a software firm, has also downsized its team by 10%, channeling resources towards artificial intelligence research and development.

ServiceNow CEO McDermott highlighted his company’s efforts in leveraging AI-powered technology to reduce recruitment expenses while achieving higher operational productivity. He claims that the company’s AI system can handle 90% of customer service duties formerly handled by human staff.

These developments underscore a significant shift in corporate strategy, where businesses are increasingly adopting automation to drive efficiency and innovation. However, they also raise questions about job security, skill requirements for future employment, and the broader implications for society at large as AI continues to permeate various sectors.