MIT expert warns: automating Gen Z entry-level jobs could cost companies way more than they think
Artificial intelligence is reshaping the job market at a speed few could have imagined just a few years ago. And in the middle of this technological whirlwind, a question emerges that goes beyond employment and unemployment numbers: what happens when companies start automating the very positions that train the professionals of the future?
That is the question Andrew McAfee, researcher at MIT and co-leader of the Initiative on the Digital Economy, is putting on the table. And his answer might surprise a lot of people in the corporate world.
According to McAfee, cutting entry-level hires because of automation is not just a risky short-term decision. It is a strategy that could seriously compromise a company’s competitiveness in the years ahead. 🤔
And the picture gets even more interesting when Gen Z enters the conversation. This generation is not just another wave of candidates competing for jobs. They are, right now, the generation that uses AI tools the most in professional settings. Around 76% of Gen Z workers reported using some kind of independent AI tool, the highest rate among all generations, according to a Deloitte study.
So what is really happening in the job market for young talent, who is swimming against the current, and what does it all mean for the future of companies betting on AI? Let’s dig in. 🚀
The real problem with cutting entry-level positions
When a company decides to replace entry-level roles with automation, it can reduce operational costs in the short term. It seems like simple math: fewer hires, lower payroll, better margins. But Andrew McAfee argues that this logic ignores a factor that is absolutely critical to the healthy growth of any organization: the talent development pipeline.
Entry-level positions, often seen as minor roles or low-value jobs, are exactly where future leaders, specialists, and decision-makers learn how things actually work, develop systemic thinking, and build the knowledge foundations they will carry throughout their entire careers.
In an interview with Harvard Business Review, McAfee was very direct about this:
How are people going to learn to do the work except through hands-on learning, training, and on-the-job apprenticeship models? That is how you learn complex knowledge work: by helping someone who already knows the stuff with the routine tasks. And when we put too much automation into that too quickly, we lose that learning ladder.
McAfee’s reasoning is grounded in a very concrete observation about how corporate knowledge spreads within organizations. A junior analyst who spends two or three years processing data, interacting with clients, supporting teams, and understanding internal processes accumulates a type of organizational intelligence that no automated system can replicate. That person learns the context, learns the company’s historical mistakes, learns the culture. And when they grow within the organization, they carry all of that with them.
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When you eliminate those positions, you are not just saving a salary. You are disrupting the natural cycle that produces professionals who deeply understand the business.
On top of that, there is a side effect that many companies only notice when it is too late. By drastically reducing entry-level job hiring, organizations end up creating a generational vacuum within their teams. Five or ten years from now, when today’s senior professionals start retiring or moving on to other opportunities, those companies will look around and realize there simply is not an intermediate generation ready to step into those roles. And at that point, the cost of fixing that gap will be infinitely greater than any savings generated by automating those initial positions. 😬
Gen Z and artificial intelligence: a deeper relationship than it seems
Gen Z, born between the mid-1990s and early 2010s, grew up in a world where technology was not a novelty. It was the environment. This generation did not need to learn how to use smartphones, social media, or digital tools as if they were foreign languages. Those were their native tongue. And when generative artificial intelligence started scaling up, especially with the boom of tools like ChatGPT and similar platforms, Gen Z was the first to incorporate these technologies into their work routines organically, without the weight of resistance or distrust that often shows up in older generations.
McAfee, who is also the co-founder of Workhelix, a startup focused on helping companies understand the return on investment in AI, made this point clearly:
There is a big demographic drop-off in AI usage. As people get older, they tend to get more stuck in their ways and less willing to try radically new things like AI. So if you are reducing your entry-level hires, you are probably sacrificing future learning opportunities and the skilled professionals of tomorrow. You are also turning off the faucet of the most enthusiastic and advanced AI users inside your organization.
Recent data from global studies on AI usage in the workplace back up this observation. Younger workers, especially those under 30, are the ones who use artificial intelligence tools the most on a daily basis, whether for writing emails, analyzing data, creating presentations, automating repetitive tasks, or even supporting strategic decisions. This puts Gen Z in a fairly unique position: they are simultaneously the most threatened by automation in entry-level roles and the most capable of working alongside those very same tools.
The paradox here is real and worth paying attention to. Companies that are cutting entry-level jobs precisely because AI can handle those tasks are, in practice, giving up on hiring the professionals who know best how to use AI. Gen Z does not just use these tools naturally — they know how to extract value from them, know when to trust the outputs and when to question them, and know how to integrate AI into workflows productively. That kind of technological fluency is exactly what companies say they want, but many are inadvertently pushing it away by closing the door on the youngest talent in the market. 🤖
A job market that is getting tougher for young professionals
For many young professionals, McAfee’s warning is not just theory. It is something they are already living through. The job market for entry-level positions has become significantly tighter in recent years.
According to the Class of 2026 Network Trends report from the Handshake platform, job postings focused on entry-level positions dropped 2% compared to the previous year and are 12% below pre-pandemic levels. Meanwhile, the unemployment rate for graduates between 22 and 27 years old sits at 5.6%, according to data from the New York Federal Reserve.
The anxiety is growing. Nearly nine out of ten members of the class of 2026 are worried about AI or automation replacing entry-level jobs. That number jumped significantly from the 64% recorded in 2025, according to a Monster survey.
Some voices in the tech industry have intensified those fears. Dario Amodei, CEO of Anthropic, for example, has said repeatedly that artificial intelligence could eliminate up to half of all white-collar entry-level jobs.
The picture looks concerning, but there is an important counterpoint. Historical data suggest that young workers may be more resilient than they think. A recent Goldman Sachs analysis found that young workers with college degrees tend to experience wage losses approximately half the size of those experienced by other displaced professionals in the decade following job loss. They are also more likely to switch occupations and move into roles that complement new technologies rather than compete with them.
The Goldman Sachs report stated that, contrary to current concerns that the costs of AI will weigh especially heavily on recent graduates, younger workers have historically been able to adjust more flexibly through occupational mobility and skill-building.
Big tech companies that are betting on entry-level talent
Not every company is pulling back on hiring young professionals. Some major players are heading in exactly the opposite direction, betting that early-career professionals will be essential for building and scaling artificial intelligence within their operations.
IBM tripling entry-level hires
IBM announced that it will triple its entry-level hiring, with the goal of building more durable skills and generating greater long-term value. Arvind Krishna, IBM’s CEO, was emphatic about the topic, stating that the company expected to hire more people straight out of college in the next 12 months than it had in recent years.
Salesforce hiring a thousand new graduates
Marc Benioff, CEO of Salesforce, announced that the company is hiring a thousand new graduates and interns to help build its AI systems. Benioff was direct on social media, commenting that people said AI would kill entry-level jobs, while in reality, those graduates and interns are the ones actually building the AI, driving projects like Agentforce and Headless360 inside Salesforce.
Amazon keeping the young talent pipeline alive
Even Amazon, which faced scrutiny for laying off thousands of workers in recent years, is maintaining its pipeline of young talent. The tech giant plans to bring in 11,000 software engineering interns in 2026, in line with previous years. Matt Garman, CEO of AWS, stated that the company is hiring as many software developers as it always has and that demand for those professionals is actually accelerating.
These examples show there is a growing understanding among major companies that investing in entry-level talent is not a cost to be cut. It is a strategic investment that will determine an organization’s ability to innovate and compete in the AI landscape over the coming years.
What companies are getting wrong and how to course-correct
The big mistake many organizations are making is treating automation and hiring young talent as opposing variables in a cost equation, when in reality they should function as complementary forces within a growth strategy. Automating repetitive, low-value tasks makes complete sense from an operational standpoint. The problem starts when that logic is applied indiscriminately, eliminating not just the tasks but also the learning and development opportunities that come with those roles.
There is a difference between using AI to help a junior analyst work more efficiently and using AI to eliminate the existence of that junior analyst altogether.
The organizations getting this balance right are the ones treating artificial intelligence as a tool that amplifies human capability rather than replaces it. They hire Gen Z professionals knowing that these young people already arrive with AI fluency, and then they invest in structured development programs that combine that technological skill with the deep business knowledge that only time and hands-on experience can build.
The result is a generation of professionals who not only know how to use the most modern tools on the market but also understand the context in which those tools need to be applied to generate real value.
McAfee makes it clear that the path forward is not to ignore automation. That would be impossible and counterproductive. The path is to be smart about which functions make sense to automate and which ones exist not just to produce an immediate result but to develop the people who will lead the company in the years ahead. That distinction might seem subtle, but it makes all the difference between a company that grows sustainably with AI and a company that saves money in the short term and wakes up a few years later with no one to steer the ship. 🎯
The future of talent in an AI-driven market
The job market is going through a transformation that has no clear precedent in recent history. The speed at which artificial intelligence is advancing and being integrated into corporate processes does not leave much room for hesitation, but it also does not forgive decisions made without proper strategic thinking. And when it comes to entry-level jobs and Gen Z’s young talent, the decision to automate or hire needs to factor in far more than an HR cost spreadsheet.
What researchers like McAfee are signaling is that companies need to adopt a long-term view of what it means to build a competitive workforce in the age of AI. That includes understanding that the young people entering the job market today, with all their digital fluency and familiarity with artificial intelligence tools, are a strategic asset that will appreciate over time — as long as they receive the right conditions to grow and develop their potential within organizations.
It is worth noting that entry-level positions tend to be among the least expensive for companies. Yet, as McAfee argues, cutting them risks undermining both cost efficiency and workforce development in the long run. It is one of those cases where saving money in the wrong place ends up costing a lot more.
Automation is here to stay, and Gen Z knows that better than any other generation. What is at stake now is not a battle between humans and machines over the job market. That narrative is already behind us. What is at stake is companies’ ability to build teams where humans and AI work together intelligently. And for that to happen, organizations need talent that grew up in this world.
Closing the door on those professionals, right now of all times, could be one of the most expensive mistakes a company makes during this turning point. 💡
