Entry-Level Share of Big Tech Hiring

Most high-forecast respondents view the 2024 drop as a temporary fluctuation driven by macroeconomic factors rather than a permanent new normal. The “recent trend is just noise mostly related to the business cycle, and overhiring in tech a few years ago, not AI,” writes one, and another that “the current trend of not hiring entry level is caused more by the end of the ZIRP [zero-interest-rate policy] era, and the recent oversupply of entry level engineers, than by AI. I expect the situation to revert closer to the mean in coming years.” Conversely, low-forecast respondents typically view the recent decline as heralding the start of a new era in which entry-level jobs are displaced by AI and capex spending on compute is prioritized; a reversion to the historical mean, therefore, is believed to be unlikely: “The decline in inexperienced hires is a structural shift in tech companies and will continue to continue going down given the sharp rise in productivity.”

Low-forecast respondents frequently emphasize that AI is already “taking over routine, entry-level tasks that [tech] companies previously hired new graduates to perform." One adds that “entry level jobs, especially in coding/software engineering are leaning more heavily towards leveraging AI for assistance, making experience a lot more important & valuable to be able to best make use of AI.” Some even believe that by 2040 “most of the entry level job[s] can be eliminated,” especially if ASI is achieved. Many high-forecast respondents, however, predict AI will instead empower new hires and create new types of roles. One writes that “as technologies mature, they become more usable by inexperienced workers” and another that “the Class of ~2029 will probably be excellent managers of LLMs.” Furthermore, some believe that “AI growth could create new junior-friendly roles (e.g., AI operations, data curation, safety evaluations)” that will absorb new entrants.

High-forecast respondents often emphasize the long-term necessity of replacing retiring workers. They note that “the Boomer and Gen X generations are rapidly retiring” and that “companies cannot hire 0% juniors forever without depleting their future senior talent pipeline” and that if the low new-hire trend persists there won’t be “enough experienced people to hire.” But many low-forecast respondents appear to believe the supply of experienced talent is sufficient to suppress junior hiring for a long time. They point to the “continued availability of experienced talent laid off or displaced in earlier cycles” and argue that automation will likely result in fewer laborers of all experience being needed, which will increase the pool of more experienced workers for the foreseeable future.

High-forecast respondents frequently cite the advanced AI skills likely to be possessed by future new hires: “Worker training/education will adapt to meet the needs of industry”; “Schools and universities are already updating curricula...so by the 2030s-2040s, we are likely to see graduates whose education and thinking are much better aligned.” Low-forecast respondents typically don’t address this factor, or when they do tend to be skeptical, with one arguing that “universities currently underserve” students with regards to teaching skills needed for the GenAI boom and another arguing that the “rapid growth in AI and machine learning roles where employers prefer strong prior experience and specialized skills...structurally disfavors fresh graduates.”

Many low-forecast respondents warn that the popping of an AI bubble could reduce entry-level pipelines further: “Given my expectation of a broader market correction, further layoffs are likely, which would push the share of entry-level hires even lower”; “Expect continued decrease over next few years, especially [if] AI bubble pops.” This high-forecast respondent, however, argues that market forces will eventually restore demand for junior workers as their price drops: “As human labor becomes less competitive, salaries will fall, making it more attractive for firms to hire people again.” Another writes, “Wages adjust. Honestly, it's that simple.”