While employers prosper from the adoption of generative artificial intelligence (AI) and AI agents, boasting of productivity gains with fewer workers, it has come at a cost for recent college graduates in alarming numbers.
The AI revolution, in fact, is beginning to “have a significant and disproportionate impact on entry-level workers in the American labor market.”
Those are among the starkest conclusions from a Stanford University study last week that found early-career employees (ages 22 to 25) in AI-exposed fields endured a 13% drop in employment since 2022, compared with more experienced workers in the same industries.
Suffering the most were aspiring applicants in software engineering, marketing, and customer service fields, where there was a 16% relative decline in employment. Computer engineering grads face double the unemployment rate of art history majors.
In many cases, AI replicated many entry-level skills that recent graduates typically offer, making them either expendable or unemployable, according to the Stanford study.
“These large language models are trained on books, articles and written material found on the internet and elsewhere,” wrote Erik Brynjolfsson, one of the Stanford economists who wrote the paper. “That’s the kind of book learning that a lot of people get at universities before they enter the job market.”
The research, which relied on payroll data rather than predictions about future AI impact, shows that while overall employment remains robust — employment remains steady or has grown for more experienced workers in the same fields, and for workers of all ages in less-exposed occupations such as nursing aides — national employment growth for young workers has been stagnant.
Stanford research has been borne out by other studies.
For example, the unemployment rate for recent computer engineering and computer science graduates is 7.5% and 6.1%, respectively, according to the Federal Reserve Bank of New York, which tracks employment outcomes for recent college graduates. The Fed’s data shows conditions remain challenging for recent college graduates during the second quarter of 2025, with an overall unemployment rate of 5.3% and underemployment rate of about 41%.
The inability of many computer science and computer engineering graduates to find work marks a significant shift from the traditional narrative that STEM fields guarantee employment. The irony is particularly stark given that these are the fields most associated with creating the AI technology that’s now affecting their job prospects.
But a jobs shortfall does exist for with AI displacing entry-level programming and technical tasks, too many graduates chasing fewer available entry-level positions, and a general skills gap in an evolving market. Compounding matters, each successive month seems to bring more advances from AI chatbots, agents, and reasoning models, say industry observers.
To no real surprise, many AI company CEOs are pushing back against the stats. They argue entry-level jobs aren’t disappearing but being shifted to more valuable work.
“There’s a lot of FUD being spread about entry level jobs being vaporized because of AI, but it’s just not going to happen,” Ragie CEO Bob Remeika said. “Just like bank tellers weren’t replaced by ATMs, AI won’t replace entry-level workers because their jobs will shift toward more complex and impactful tasks. Entry level jobs won’t go away, but the job that they do will look drastically different to the job they are being asked to do today. Those that can learn the new job the fastest won’t stay entry level for long.”
SecurityPal CEO Pukar Hamal added that companies not hiring young workers now will be the ones disrupted later. “Gen Z is the most AI-native generation,” he said. “Cut them out and you don’t just lose junior roles. You kill succession planning. Incumbents end up weaker, not stronger.”
