ServiceNow CEO warns: unemployment among recent graduates could hit 30% due to AI automation
Artificial intelligence is reshaping the job market at a speed few predicted, and recent college graduates are right at the epicenter of this transformation. Bill McDermott, CEO of ServiceNow, a $123 billion American software giant, made a statement that set off every possible alarm for anyone walking out of college right now.
In a recent interview with CNBC, McDermott said that unemployment among recent college graduates, which already hovers around 9%, could easily climb to the 30% range in the coming years. The reason? AI agents, which are arriving at companies on a massive scale and taking over exactly the roles that used to go to early-career professionals.
Currently, about 5.6% of recent American graduates between 22 and 27 are unemployed, a number above the 4.2% rate for the general population, according to data from the Federal Reserve Bank of New York. But the concern is not just the current figure. It is the trajectory it could follow as automation advances without showing any signs of slowing down.
McDermott predicted that roughly three billion non-human digital agents will be integrated into businesses by 2030. These agents have the ability to perform routine tasks that were traditionally handled by junior and mid-level employees. In the CEO’s view, this creates a scenario where it will become increasingly difficult for young people to stand out in a corporate environment. 👀
What is behind this alarming projection
When McDermott talks about unemployment reaching 30% among graduates, he is not speculating in a vacuum. He is observing a trend that is already playing out inside technology and software companies around the world. Junior-level hiring, those positions that historically served as the gateway for people fresh out of college, is shrinking significantly and consistently.
Companies that used to build large teams with dozens of analysts, assistants, and junior coordinators each recruiting cycle are now testing lean teams powered by AI tools. The practical result is that the volume of opportunities available to people without consolidated experience is dropping, while competition for the remaining openings is increasing dramatically.
Automation is nothing new, of course. But the speed at which it is penetrating the most basic layers of the corporate market is something unprecedented in recent decades. Before, when people talked about automation, the focus was on production lines, repetitive manual tasks, and industrial processes. Now, the conversation has shifted to an entirely different level. AI agents can draft reports, analyze massive volumes of data, respond to emails, organize spreadsheets, create presentations, and even make simple decisions based on predefined parameters.
All of these are functions that, until recently, made up the day-to-day work of junior professionals — the very people who were learning how the market operates while performing these tasks. That cycle of hands-on learning, which has always been essential for professional development, is being interrupted before it even begins.
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Tech leaders have been warning about this for a while
McDermott is not the first heavyweight executive to sound this alarm. Leaders with front-row seats to the AI revolution have been talking about the impact of this technology on employment for some time, and their statements are getting sharper by the day.
Geoffrey Hinton, widely considered the godfather of artificial intelligence, warned that unemployment will grow because wealthy people will use AI to replace workers. Dario Amodei, CEO of Anthropic, predicted that half of all office jobs will be automated by 2030. And Sam Altman, head of OpenAI, said the technology is already keeping entry-level professionals up at night, comparing current AI capabilities to those of an intern who can work for a few hours but will soon function like an experienced software engineer capable of working for days straight.
These are not isolated voices or opinions from people on the sidelines. They are the very creators and operators of the tools that are transforming the job market. When the people building the technology say it will profoundly impact employment, it is reasonable to pay attention. 😬
The numbers already show the impact
While the projections spark debate, the data already available confirm that the shift is not just theoretical. Since ChatGPT took the world by storm in 2022, job postings in the United States have plummeted nearly 32%, according to an analysis of Federal Reserve data conducted in November 2025.
In February 2026, the American economy unexpectedly eliminated 92,000 jobs, marking the largest drop since October of the previous year. And the most recent reports have not brought reasons for optimism among first-time job seekers.
For young people without experience, the picture is even more challenging. According to a Kickresume report, about 58% of Gen Z students who graduated in 2024 and 2025 were still looking for their first job. For comparison, only 25% of millennial and Gen X graduates faced the same situation in prior years.
Job listings on Handshake, a platform focused on early-career talent, also dropped more than 16% between August 2024 and August 2025. At the same time, the average number of applications per listing rose 26%. In other words, fewer openings and more people fighting for each one. The math just does not work out for those entering the market now.
Even the tech sector is pulling back on junior hires
If there is one sector where hiring young talent straight out of college has always been a tradition, it is tech. Major tech companies used to run robust trainee and internship programs, attracting top students with high salaries and aggressive career tracks. But even that is changing.
According to a 2025 report from venture capital firm SignalFire, hiring of recent graduates at the 15 largest tech companies has dropped more than 50% since 2019. Before the pandemic, Gen Z graduates accounted for 15% of Big Tech hires. Now, that share has fallen to just 7%.
There is debate among leaders over whether this pullback reflects AI-driven automation or a natural correction from the hiring surge during the pandemic. But on one point most agree: entry-level jobs are the most vulnerable to artificial intelligence.
J. Scott Davis, assistant vice president at the Federal Reserve Bank of Dallas, reinforced this perception by arguing that young workers primarily possess theoretical knowledge, which is easily automated by AI tools, unlike practical experience accumulated over years of work. In his words, the returns on professional experience are increasing in occupations exposed to AI, and young people with predominantly codifiable knowledge and limited experience will likely face challenging job markets.
Gen Z at the center of a perfect storm
Gen Z grew up with technology in their hands. They are people who use apps, social media, and digital tools with a fluency that previous generations took years to develop. But there is an important difference between consuming technology and working professionally with it inside a corporate environment.
Knowing how to use TikTok or edit a video on your phone is very different from knowing how to configure an AI agent, interpret the outputs it generates, identify errors in the model’s reasoning, or integrate these tools into a real workflow. That distinction is exactly what the market is starting to demand, and many graduates arrive at their first job without that skill developed in any practical way.
Another factor complicating the situation is that more experienced professionals are adapting to AI tools faster than anyone expected. A senior professional who learns to use an AI agent well can deliver the work that used to be split between them and two or three junior assistants. This reduces the demand for less experienced labor — not because these young people are less capable, but because the economic equation has changed. For companies, it makes more sense to invest in a professional who already knows the business and now also commands automation tools than to hire a large team of recent graduates who still need extensive time and training.
What turns this scenario into a true perfect storm is that traditional university education has not kept up with the speed of this change. Academic curricula, for the most part, continue producing professionals for a market that is ceasing to exist in the form it was known. Meanwhile, companies are already operating at a completely different pace, demanding professionals who know how to work with AI and not just alongside it. This gap between what universities deliver and what the market expects has become one of the biggest obstacles for anyone trying to take their first career step today. 🎯
The long-term risk that companies are ignoring
On the corporate side, McDermott’s message also carries a weight that cannot be dismissed. Stopping the hiring of graduates because AI handles part of the work may seem efficient in the short term, but it creates a serious problem on the five to ten year horizon.
Today’s senior leaders were yesterday’s juniors. They learned the business by making mistakes, receiving feedback, and being mentored by those who already had experience. If that internal development pipeline is disrupted because of automation, companies will look at their leadership ranks in the future and realize there is an enormous void of professionals with institutional knowledge and hands-on experience to lead teams and make strategic decisions.
Artificial intelligence does not replace that human development cycle. It can accelerate it and make it more efficient, but it cannot exist without it. A company that is not developing new talent today is, in practice, compromising its own leadership capacity for the future.
What changes the outcome of this equation
It would be a mistake to see this scenario as a final verdict for Gen Z graduates. What is happening is a deep reconfiguration of the job market, not a total closing of doors. Opportunities are shifting toward areas where AI still needs human oversight, where critical judgment, creativity, and the ability to connect with people make a real difference.
Sectors like healthcare, education, research, strategic design, and people management continue to demand skills that no language model can replicate with the same depth and human sensitivity. The challenge lies in identifying these spaces and positioning yourself in them with intentionality and preparation.
For young people about to enter the market, the landscape demands a different approach to their own professional development. Expecting that college provided all the necessary tools is a risky bet at this point. Some competencies have become practically mandatory:
- Learning to use AI tools in a practical, applied way within a professional context
- Understanding how language models work, what they do well, and where they tend to fall short
- Developing skills that automation cannot replicate, such as critical thinking, interpersonal communication, and creative problem-solving
- Seeking hands-on experience as early as possible, whether through internships, volunteer projects, or freelance work
- Staying up to date on market shifts and adapting your career plan as the landscape evolves
This is not about becoming a developer or a data scientist. It is about having enough familiarity with the technology to work effectively with it on a daily basis, regardless of your field.
Unemployment among Gen Z graduates reaching 30% is not an inevitable fate, but it is a scenario that becomes increasingly likely if the market, universities, and young people themselves do not respond to this transformation with the urgency it deserves. Artificial intelligence is here to stay, AI agents will keep advancing, and automation will continue eliminating the most basic layers of many corporate functions. What changes the outcome of this process is the ability to adapt — both for the institutions and the individuals who need to navigate this new market. 💡
