Automation has hit the job market hard, and a lot of companies are betting on it to cut costs — especially in entry-level jobs held by Gen Z.
The problem is that this strategy can be a double-edged sword.
Andrew McAfee, a research scientist at MIT and co-lead of the institution’s Initiative on the Digital Economy, raised a major red flag: by eliminating entry-level positions, companies aren’t just trimming today’s headcount. They’re destroying the pipeline that builds tomorrow’s leaders.
According to McAfee, who is also the co-founder of startup Workhelix — focused on helping companies understand the return on investment in AI — the logic is straightforward. In an interview with Harvard Business Review in April, he asked: how are people supposed to learn to do the work if not through hands-on learning, training, and internships? That’s how you learn to do difficult intellectual work — by helping someone who’s already good at it with the more routine tasks. And when we throw too much automation at that too quickly, we lose that learning ladder.
And there’s another detail that makes this whole scenario even more ironic 👀
Gen Z — the very generation being pushed out of the job market because of artificial intelligence — is exactly the group that knows best how to use these tools. Cutting them out now could mean losing the greatest human asset available for scaling AI across organizations.
It’s a paradox the market still doesn’t quite know how to solve — and the consequences could be felt for years.
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What’s happening with entry-level jobs?
For decades, entry-level jobs served as the gateway into the corporate world. That’s where professionals learned the basics, absorbed company culture, made mistakes without major consequences, and developed skills that no textbook could teach. These kinds of roles were never just about productivity — they were about growth and development. And it’s exactly that invisible function being overlooked when companies replace junior analysts, assistants, and interns with automated artificial intelligence workflows. The financial reasoning makes sense in the short term: an AI tool doesn’t take vacations, doesn’t ask for a raise, and delivers reports in seconds. But what that math doesn’t account for is the long-term cost of having no one trained to manage, question, and evolve those systems.
McAfee’s research shows that the risk isn’t just operational — it’s strategic. When a company systematically eliminates entry-level positions, it breaks a natural talent development cycle that takes years to rebuild. The problem becomes obvious when, five or ten years down the road, that same organization needs an experienced senior manager and realizes it simply never developed anyone to fill that role. The corporate ladder lost its first few rungs, and now nobody can climb it.
This trend is already showing up in the numbers. Job listings on Handshake, a platform focused on entry-level positions, dropped 2% compared to the previous year and sit 12% below pre-pandemic levels, according to the class of 2026 trends report. Meanwhile, the unemployment rate among recent college graduates aged 22 to 27 has reached 5.6%, according to the New York Fed. The practical result has been a market with fewer real opportunities for people just starting their careers, especially young Gen Z workers who graduated in the last two or three years and found a landscape very different from what they expected.
Gen Z and AI: a more complex relationship than it seems
Gen Z grew up surrounded by technology. It’s no exaggeration to say this generation has a level of digital fluency that no other generation has ever had so naturally and intuitively. A November 2025 Deloitte study found that about 76% of Gen Z has already used an autonomous AI tool — the highest rate among all generations. When solutions like ChatGPT, Midjourney, and dozens of other artificial intelligence tools exploded in popularity, it was young people who adopted them first in their daily lives — for studying, creating, working, and even starting businesses. That means the group most affected by the closure of entry-level positions is, at the same time, the group best prepared to work with the technologies causing those closures. It’s an irony that’s hard to ignore.
Companies cutting entry-level jobs with the argument that AI does the work more efficiently are, in practice, letting go of the people who would most easily know how to operate, fine-tune, and expand the use of those tools internally. Talent development in AI within organizations depends on professionals who understand both the business and the technology — and Gen Z has a unique combination of both.
McAfee reinforces this point when talking about the behavior of different generations. According to him, there’s a significant demographic drop-off: as people get older, they tend to be more attached to their habits and less willing to try new and bold things, like AI. In other words, by pulling back on entry-level hiring, a company doesn’t just sacrifice future learning opportunities and tomorrow’s qualified professionals — it also shuts off the pipeline of the most enthusiastic and advanced AI users within the organization itself.
Gen Z’s fears and the other side of the story
For many young people, McAfee’s warning already feels like it’s coming true. Anxiety has spiked among recent graduates: nearly nine out of ten graduates from the class of 2026 are worried that AI or automation could replace entry-level positions — a sharp jump from the 64% recorded in 2025, according to data from Monster.
Some tech industry leaders even fueled that fear. Anthropic CEO Dario Amodei repeated for quite some time — though he later walked it back — the prediction that AI could eliminate up to half of all entry-level administrative jobs.
But it’s not all doom and gloom. Historical data suggests young workers may be more resilient than they think. A recent Goldman Sachs analysis showed that young workers with college degrees tend to experience wage losses roughly half as severe as other displaced workers in the decade following a layoff. On top of that, they find it easier to switch occupations and move into roles that complement new technologies rather than competing directly with them.
According to the report, contrary to current concerns that AI’s costs will fall disproportionately on recent graduates, younger workers have historically managed to adapt more flexibly through occupational mobility and skills upgrading.
Companies betting on Gen Z
Not every organization is pulling back. Some major employers are making the opposite move — betting that early-career professionals will be essential to building and scaling AI.
IBM is one of the most notable examples. The company announced it would triple its entry-level hiring, partly to build more lasting skills and generate greater long-term value. CEO Arvind Krishna was straightforward about it in October 2025: while many are talking about layoffs or hiring freezes, he said he wanted to do the opposite. According to Krishna, IBM would likely hire more recent graduates over the next 12 months than it had in recent years.
Salesforce followed a similar path. In April, CEO Marc Benioff announced the hiring of a thousand new graduates and interns to help build the company’s AI systems. In a post on X, he directly pushed back against the pessimistic predictions, saying that despite claims AI would kill entry-level jobs, it’s precisely these young people and interns who are building the technology — bringing products like Agentforce and Headless360 to life.
Even Amazon, which faced scrutiny after laying off thousands of workers in recent years, is maintaining its pipeline of young talent. The tech giant plans to bring on 11,000 software engineering interns in 2026, in line with previous years. AWS CEO Matt Garman stated that the company is hiring as many software developers as it always has — and that, in fact, demand for those professionals is accelerating more than ever.
Talent development in the age of automation
The concept of talent development needs to be urgently rethought within companies. For too long, it was treated as a secondary perk — nice to have but not essential. With the acceleration of automation and artificial intelligence, that view is completely outdated. Today, an organization’s ability to develop, retain, and grow its professionals is just as strategic as any product decision or technology investment.
McAfee argues that companies need to view entry-level jobs not as a cost to be optimized but as an investment in future capability. That means rethinking which roles truly need to be automated right now and which still have developmental value — both for the individual and the organization. Not every repetitive task should be eliminated immediately just because the technology allows it. Some of those tasks are where beginners learn to think, solve problems, and understand how the business actually works. And it’s worth remembering that entry-level positions tend to be the cheapest labor a company can hire — cutting them hurts both cost efficiency and long-term workforce development.
The good news is that some organizations are already starting to see this shift and are adjusting their strategies. Instead of simply cutting positions, they’re redesigning roles — creating hybrid positions where early-career professionals work alongside artificial intelligence tools, learning to supervise, audit, and improve the results of those technologies. This model not only preserves the talent development pipeline but also creates an entirely new category of professional: someone who deeply understands both the human context of the business and the logic of AI tools. And that combination, in today’s market, is worth its weight in gold. 🏆
The central point here is simple: automation and talent development don’t have to be opposites. But for them to work together, companies need to stop making short-term decisions without considering the structural impact they cause in the long run.
Gen Z isn’t a passive victim in this process — they have the tools, the mindset, and the adaptability to be the protagonists of the next phase of the job market. What’s often missing is the opportunity to walk through the door. And that door, right now, is being shut before it’s even opened.
