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.
