AI Tools Reduce Entry-Level Hiring for Recent College Graduates

Companies are using AI to perform tasks previously handled by entry-level employees, making it harder for recent college graduates to find work in some fields. The average unemployment rate for recent college graduates ages 22 to 27 stood at 5.4 percent in 2025, up from the long-term average of 4.5 percent since 1990, according to data from the Federal Reserve Bank of New York.

A Stanford University study found that early-career workers in AI-exposed roles experienced 16 percent slower employment growth between mid-2024 and September 2025 compared with workers in less exposed positions. Researchers used payroll data from ADP and controlled for company-specific factors, interest rates and remote work.

The slowdown was concentrated in fields such as software development, marketing and sales. A separate analysis by a U.S. Census Bureau economist found that hiring of workers ages 22 to 24 in AI-exposed industries fell 9 percent after the launch of ChatGPT in late 2022.

Employment in those industries declined 12 to 15 percent between the third quarter of 2022 and the second quarter of 2025, resulting in roughly 150,000 fewer early-career jobs.

Chase's chief analytics officer said the bank may adjust the size of its recruiting classes depending on business needs and the availability of AI tools. He added that new hires who do join the firm are increasingly expected to manage AI systems rather than perform the underlying work themselves.

WHP Global CEO Yehuda Shmidman said his company wants to hire more entry-level workers who already know how to use AI tools effectively. com founder and CEO Omair Tariq said graduates who can demonstrate they can use AI to complete the work of multiple people will still find jobs.

Some companies including Ford and AT&T are increasing recruitment for skilled trade positions while reducing hiring in certain professional roles. The decline in early-career hiring appears driven mainly by fewer new hires rather than increased layoffs, according to the Census Bureau analysis.