Job prospects for early-career workers took a turn for the worse last year. In the first quarter of the year, the job market for 22-to-27-year-olds “deteriorated noticeably,” according to a New York Fed report. Later, Fed Chair Jerome Powell admitted that AI might be partly to blame. Companies that would have ordinarily hired recent graduates are now increasingly trying to have AI assistants automate that work, Powell explained. By the end of the year, the job market for these young workers was at its harshest since the worst days of the pandemic. Now, a global survey of CEOs by consulting firm Oliver Wyman indicates that things could get even worse over the next two years. According to the survey, the share of CEOs saying that they were looking to reduce junior roles over the next year or two doubled to 43% from 17% just last year. Only 17% of CEOs said they are shifting hiring to focus on more junior positions. Instead of young workers, executives are increasingly focusing on hiring older workers. Roughly 30% of respondents said they are shifting hiring to more mid-level roles, up from only 10% last year.
The change is AI-driven, the report concludes. “Notably, the CEOs with the longest planning horizons are the most likely to plan headcount reductions,” the report said. “That suggests they expect a structurally leaner organization not as a cost measure but as the destination — the endpoint of an AI-augmented operating model that requires fewer people, deployed differently.”
