8 in 10 Companies Plan to Layoff Recent Grads in Favor of AI

The rise of AI is threatening entry-level jobs traditionally filled by recent graduates, requiring them to develop new skills like AI proficiency to stay competitive.

Artificial intelligence tools (AI) are coming after early-career opportunities traditionally given to recent college graduates and interns.

According to a survey of 804 U.S. hiring managers commissioned by Intelligent, 78% of hiring managers say their companies plan to layoff recent college graduates within the next year due to the increasing use of AI in the workplace.

This alarming pattern would have severe implications in the job market, particularly for entry-level positions — which are typically filled by recent graduates and student interns. This could make it more challenging for recent college graduates to land their first professional job given the already competitive nature of the labor market this year.

According to the report, “Of companies that will lay off recent graduates, 23% report that less than 3% will be let go. Twenty-seven percent believe 5% to 10% of recent graduates will lose their job, and 11% say between 15% to 30%.”

The survey suggests that AI is very quickly taking over tasks commonly assigned to interns and new graduates — such as data entry, email writing, research, task management, and customer support. Moreover, 7% of companies in the survey said they already offer fewer jobs to recent graduates, with over half (53%) citing AI as the primary reason for this reduction.

The majority of hiring managers in the survey (70%) also believe that AI can effectively perform the work of interns. Meanwhile, 69% agree that AI can handle the responsibilities of recent college graduates.

This suggests a notable change in perception of AI tools by managers across the workforce — suggestive of a growing preference for AI tools over early career professionals.

Notably, the data reveals that 57% of hiring managers trust AI’s work more than that of interns and 56% trust AI over recent graduates.

Despite the early-career challenges posed by AI, the demand for AI proficiency among these professionals remains high too. Intelligent reports a majority 95% of hiring managers are more likely to hire recent graduates with an AI background. This figure stresses the importance of recent college graduates to develop AI-related skills to remain competitive in today’s job market.

For recent or upcoming college graduates who are kick-starting their career in 2024, learning AI-related skills will prove to be of high value in securing employment in an increasingly automated world.

Prominent U.S. business schools including Wharton, Columbia, Duke and American University are already moving swiftly to integrate AI instruction throughout their core MBA and undergraduate coursework.

The trends suggest that many universities and higher education facilities will have to reevaluate their curricula to better prepare students for the future job market — which undouble will rely heavily on how well workers will be able to utilize AI.