AI's Impact on Tech Hiring: Entry-Level Jobs See Decline as Companies Rely More on Experienced Professionals

Artificial intelligence (AI) may already be shrinking entry-level jobs in the tech industry, according to new research. The idea of whether and when AI will start replacing human labor has been widely debated, but recent data suggests it may be happening sooner than expected. A survey by the World Economic Forum found that 40% of employers plan to reduce their workforce where AI can automate tasks. This aligns with findings from a data-driven venture capital firm, SignalFire, which tracks job movements for over 600 million employees and 80 million companies on LinkedIn. SignalFire researchers believe their data may be revealing early signs of AI's impact on hiring trends. When analyzing these trends, SignalFire observed that tech companies hired fewer recent college graduates in 2024 than they did in 2023. Specifically, big tech companies, including the top 15, reduced the hiring of new graduates by 25% in 2024 compared to the previous year. Startups also saw a decrease, with graduate recruitment dropping by 11%. Although SignalFire did not disclose the exact number of fewer graduates hired, a spokesperson confirmed it was in the thousands. Asher Bantock, SignalFire’s head of research, acknowledges that the adoption of new AI tools may not entirely explain this decline. However, he points to "convincing evidence" that AI is a significant contributing factor. Entry-level roles, characterized by routine and low-risk tasks, are particularly vulnerable to automation. AI's capabilities in coding, debugging, financial research, and software installation suggest that fewer new graduates are needed for these functions. Gabe Stengel, the founder of AI financial analyst startup Rogo, illustrated this point during a panel at Newcomer’s financial technology summit. He began his career at Lazard investment bank, where he analyzed potential acquisitions for pharmaceutical companies. Stengel noted that Rogo’s AI tool can perform almost all of the tasks he once handled, from compiling materials to conducting thorough financial reviews. While major investment banks like Goldman Sachs and Morgan Stanley have not yet officially cut junior analyst positions due to AI, the New York Times reported last year that these firms were considering reductions of up to two-thirds in junior hiring and lowering starting salaries. The reasoning is straightforward: AI makes the work less demanding, thus reducing the need for large numbers of entry-level analysts. Despite the threat to low-skilled jobs, the demand for experienced professionals continues to rise. According to SignalFire's report, big tech companies increased hiring by 27% for professionals with two to five years of experience. Similarly, startups hired 14% more individuals in the same seniority range. This creates a daunting challenge for recent graduates: the classic Catch-22 of needing experience to get hired, but struggling to gain that experience without a job. Heather Doshay, SignalFire’s people and talent partner, emphasizes that AI intensifies this issue. Her advice to new graduates is clear: master AI tools. “AI won’t take your job if you’re the best at using it,” she asserts. In summary, the tech industry's adoption of AI appears to be altering hiring patterns, with a notable decline in entry-level positions and a concurrent increase in roles for experienced professionals. For recent graduates, the key to navigating this shift may lie in becoming proficient in AI technologies, thereby making themselves indispensable in an increasingly automated job market.