Is AI Shrinking Entry-Level Tech Jobs?

The debate around AI's impact on human labor continues. New research suggests that AI may already be affecting entry-level tech positions.

A recent World Economic Forum survey found that 40% of employers plan to reduce staff through AI-driven task automation. SignalFire, a data-driven VC firm, analyzed hiring trends on LinkedIn, tracking over 600 million employees and 80 million companies. Their findings indicate a potential shift in the tech job market.

Declining Graduate Recruitment

SignalFire's research reveals a decrease in recent college graduate hiring by tech companies in 2024 compared to 2023. Big tech companies, particularly the top 15, reduced graduate recruitment by 25%. Startups also saw an 11% decline.

While other factors may contribute, SignalFire's head of research, Asher Bantock, points to "convincing evidence" that AI plays a significant role. Entry-level roles often involve routine tasks easily handled by generative AI, making them susceptible to automation.

AI's growing capabilities in coding, debugging, financial research, and software installation could reduce the need for entry-level employees in these areas.

Rogo founder Gabe Stengel stated at a recent fintech summit that their AI tool "can do almost all the work I did in the analysis of those companies...We can put together the materials, diligence the company, look through their financials."

Reports suggest that investment banks like Goldman Sachs and Morgan Stanley have considered reducing junior staff hires and lowering pay due to AI's impact on workload.

Increased Demand for Experienced Professionals

While entry-level hiring may be declining, the demand for experienced professionals remains strong. SignalFire's report shows big tech increased hiring by 27% for professionals with 2-5 years of experience, with startups showing a 14% increase in the same category.

Navigating the Changing Job Market

This creates a challenge for recent graduates: needing experience to get hired, but struggling to gain experience without a job. SignalFire's Heather Doshay advises new graduates to master AI tools. "AI won't take your job if you're the one who's best at using it," she said.

The evolving landscape of the tech job market requires adaptability and a proactive approach to skill development in the age of AI.