AI tools are already spurring fierce job competition among Bambi-legged Gen Zers hoping to land their first entry-level job out of college. And the situation could get even worse, one tech boss is warning.
“I think young people coming out of university today [are experiencing] 9% unemployment,” Bill McDermott, the CEO of AI-driven software company ServiceNow, recently told CNBC. “I think it could easily go into the mid-30s in the next couple of years.”
When evaluating what is disrupting the budding workforce, the boss of the $123 billion American tech giant pointed the finger at AI agents. McDermott predicted that there will be about three billion digital, non-human agents added to enterprises by 2030, which have the ability to automate routine tasks typically done by entry and mid-level employees.
“What’s happening now, for the non-differentiating roles, [is] so much of the work is going to be done by agents,” the ServiceNow CEO continued. “So it’s going to be challenging for young people to differentiate themselves in a corporate environment.”
Already, around 5.6% of recent U.S. college graduates aged 22 to 27 are unemployed, compared to 4.2% of the general population, according to the Federal Reserve Bank of New York. And looking ahead, CEOs and experts alike are hesitant that entry-level hiring will make a comeback anytime soon. McDermott added that if other leaders follow ServiceNow in giving AI agents use cases humans were once assigned, “that will definitely put a damper on who you need to hire.”
Fortune reached out to ServiceNow for comment.
Fresh-faced graduates are caught in the crosshairs of an AI work revolution
Tech leaders with a front-row seat to the AI-driven workforce revolution have been sounding the alarm of a job takeover. The “godfather of AI” Geoffrey Hinton warned that unemployment will balloon because “rich people are going to use AI to replace workers”; Anthropic CEO Dario Amodei predicted that half of white-collar jobs would be automated by 2030; and OpenAI leader Sam Altman said the advanced tech is already giving entry-level workers a run for their money.
“Today [AI] is like an intern that can work for a couple of hours, but at some point it’ll be like an experienced software engineer that can work for a couple of days,” Altman said during a panel with Snowflake CEO Sridhar Ramaswamy last year.
As AI continues to advance at a breakneck pace, employment for vulnerable young workers has taken a turn for the worse. Since ChatGPT took the world by storm in 2022, U.S. job postings have plummeted by nearly 32%, according to a November 2025 analysis of Federal Reserve data. And 2026 reports have failed to drum up optimism, as the American economy unexpectedly shed 92,000 jobs in February, marking the biggest decline since last October.
And just as McDermott observed, young inexperienced workers are most susceptible to the shift. About 58% of Gen Z students who graduated in 2024 and 2025 were still looking for their first job, compared to just 25% of millennial and Gen X graduates in previous years, according to a Kickresume report released last year. Job postings on early-career talent platform Handshake also fell more than 16% between August 2024 and August 2025, while the average number of applications per role has jumped 26%.
Hiring is down for Gen Z grads, even in tech
Even industries that are famous for plucking young, spry talent right out of college and putting them in high-paying jobs are reeling back.
Hiring for new graduates in the tech sector at 15 of the largest companies fell by over 50% since 2019, according to a 2025 report from VC firm SignalFire. Before the pandemic, these Gen Z grads made up 15% of Big Tech hires—now, they only account for 7%.
Leaders are split on whether the current job market, marked by massive layoffs and stalled hiring, is reflective of AI automation or a correction of pandemic-era overhiring. But many can agree on one thing: entry-level jobs are the most endangered by AI. J. Scott Davis, assistant vice president of the Dallas Fed, believes young workers primarily have book smarts easily automatable by AI tools—unlike work experience.
“Returns on job experience are increasing in AI-exposed occupations,” Davis recently wrote. “Young workers with primarily codifiable knowledge and limited experience will likely face challenging job markets.”
Written by Emma Burleigh for Fortune as “ServiceNow CEO says that new college graduate unemployment could reach 30% thanks to AI automation” and republished with permission.
