Is AI destroying the career ladder?

Anshuman Singh at HGS UK explores AI’s impact on entry-level careers and the future workforce

 

Investment in artificial intelligence (AI) technology is set to dwarf that of earlier foundational technologies, with the Big Tech quartet of Microsoft, Meta, Amazon and Alphabet (Google’s parent company) expected to account for nearly $400 billion in AI spending in 2025, far exceeding the inflation-adjusted $10 billion infrastructure expenditures for electricity in the 1930s. Like electricity before it, AI is not just automating tasks; it is enabling new types of work and efficiency, reshaping the labour market profoundly and swiftly.

 

AI is often likened to electricity in terms of its transformative potential. The commercial adoption of electricity in the early 20th century redefined entire industries and economies by creating new productivity possibilities and rendering some jobs obsolete. Today, AI is following a similar path, rapidly changing how work is done, especially in entry-level roles, but on a much faster and more global scale.

 

While commercial use cases for AI have been in existence since as early as 2016 (think Alexa, Netflix recommendations, Google DeepMind AlphaGo), the current euphoria stems from the potential of Generative AI and its apparent ability to perform tasks typically considered entry-level work, thereby unlocking productivity gains not seen since the Industrial Revolution.

 

 

Hard evidence for a paradigm shift

Robust data from Stanford University’s analysis of ADP payroll records combined with findings from the World Economic Forum (WEF) highlight a clear trend: since late 2022, employment for young workers aged 22–25 in AI-exposed occupations, such as software development and customer service, has declined by approximately 13 percent in the U.S. In the UK, entry-level job vacancies have fallen by 32 percent, one of the sharpest declines recorded, reflecting a global pattern. The WEF reports that AI can automate between 50-60 percent of typical entry-level analytical tasks, accelerating these employment declines.

 

In contrast, employment for older workers in similar AI-exposed roles and for younger workers in less AI-susceptible occupations has remained stable or increased, reaffirming that AI, not broad economic slowdown, is the primary disruptor.

 

 

AI, not economics, is driving the decline

The distinction between AI disruption and economic downturn is confirmed as employment losses are highly selective by age and occupation. These declines align closely with the rapid adoption of generative AI technologies and persist after controlling for firm-specific and macroeconomic conditions.

 

For instance, the UK Office for National Statistics (ONS) has not updated its formal estimates of jobs at risk from automation or AI since 2017, citing a lack of new data for 2018–2025. They direct stakeholders to other government-commissioned analyses, like PwC’s, for the latest insights.

 

 

Uneven impacts and new opportunities

White-collar entry points – especially in software, customer service, financial services, and even marketing – are the most exposed. Here, AI now performs the very “grunt work” that once enabled young staff to build the foundation of a career, from report generation to research support and basic problem solving. In finance and tech, entire classes of back-office and research roles are shrinking; large firms are explicitly citing AI when cutting hundreds of graduate jobs.

 

Creative jobs present a more nuanced picture, with AI tools often supplementing human creativity rather than fully replacing it. The value of originality, design, and cultural fluency means some creative functions are redefined, not just lost – those who master “AI plus human” workflows remain in demand.

 

By contrast, blue-collar and skilled trade roles are less exposed. Jobs that require physical presence, complex manual skills, or real-world problem solving, such as in healthcare, construction and maintenance, show relative resilience. In some health aide jobs, employment for young people is rising; this is strong evidence that this wave of workplace automation is not universal.

 

 

The risk to social mobility and talent pipelines

Beyond the numbers, there is a real risk to social mobility. The loss of entry-level roles threatens to break the “ladder” that lifts individuals from novice to expert, jeopardising mid-career talent pipelines for entire industries. A survey from the WEF revealed that 40 percent of employers expect to reduce workforce size in areas where AI can automate core tasks.  Meanwhile job seekers are reassessing the value of traditional degree credentials, with 49 percent of Gen Z job hunters saying AI has devalued a university education in the hiring market.

 

If firms continue to eliminate or outsource entry-level positions en masse, the sector could face a severe leadership deficit decades down the line.

 

 

Upskilling, redesign, and global shifts

Even as opportunities shrink at the entry-level, new doors may open. AI may democratise access to high-skilled jobs, allowing more rapid upskilling via digital apprenticeships, and internationalise recruitment as companies deploy more work overseas. The B-schools and universities of the future are already reshaping curricula to prepare graduates for an “AI-plus-human” career reality.

 

At the same time, the challenge for business and policy is to redesign entry-level work so that young professionals, regardless of background, can still learn the tacit skills and judgment needed to move up and eventually lead. Companies restructuring for cost savings must weigh the short-term gains of automation against the longer-term need for a robust, skilled leadership pipeline.

 

AI, like technologies before it, is disrupting, displacing, and redefining the modern economy at incredible speed. While some displacement is unavoidable and even necessary, the risk is that an entire generation’s access to careers and advancement could be narrowed, just as new technological frontiers open. Meeting this challenge will require unprecedented collaboration between government, educators, and employers to ensure that, as work changes, the path to progress and prosperity remains open to all. 

 

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Anshuman Singh is CEO at HGS UK

 

Main image courtesy of iStockPhoto.com and DNY59