Artificial intelligence is poised to transform the job landscape for recent college graduates, potentially eliminating many entry-level positions in white-collar fields, experts warn. This shift comes as AI technology, particularly chatbots, continues to advance rapidly. Dario Amodei, CEO of Anthropic, which developed the AI model Claude, stated that AI could reduce U.S. entry-level jobs by half within the next five years.

The urgency of this issue was underscored when Business Insider announced a 21% staff layoff, with CEO Barbara Ping declaring the company would go "all in on AI" to enhance efficiency. Analysts suggest that AI could significantly alter or replace entry-level roles in sectors like computer programming and law, which are often targeted by new graduates. However, they also note that current job challenges for this demographic are influenced by broader economic conditions, not solely by technological advancements.

Lynn Wu, a professor at the University of Pennsylvania, expressed sympathy for recent graduates facing a tough job market. "We're in the flux of dramatic change," Wu said. "In the short run, they may stay with mom and dad for a while. But in the long run, they'll be fine. They're AI natives."

The New York Federal Reserve reported a noticeable decline in the job market for recent graduates in early 2025, with the unemployment rate reaching 5.8%, the highest since 2021. The underemployment rate also surged above 40%. Anu Madgavkar, head of labor market research at the McKinsey Global Institute, attributed this youth unemployment to broader economic trends rather than AI alone. "There is a lot of economic uncertainty," Madgavkar said, referencing the impact of President Donald Trump's tariff policy on business confidence.

Despite the economic backdrop, analysts agree that entry-level white-collar jobs are particularly vulnerable to AI. Tasks traditionally performed by low-level employees, such as legal assistants gathering case precedents or computer programmers writing basic code, are at risk of automation. Madgavkar noted, "Is the bleeding edge or the first type of work to be hit a little more skewed toward entry-level, more basic work getting automated right now? That's probably true. You could have fewer people getting a foothold."

Wu bluntly stated, "The biggest problem is that the career ladder is being broken." However, Madgavkar believes that while entry-level positions may evolve, they will not entirely vanish. She emphasized that managers will increasingly value problem-solving and analytical skills over tasks that rely solely on effort. "I don't think it means we'll have no demand for entry-level workers or massively less demand," she said. "I just think expectations for young people to use these tools will accelerate very quickly."

Certain jobs remain largely insulated from AI automation, particularly those requiring hands-on skills, such as manual labor and trades, as well as professional roles like doctors and upper management. Isabella Loaiza, a researcher at the Massachusetts Institute of Technology, co-authored a study examining job shifts in the U.S. economy from 2016 to 2024. She noted that rather than diminishing the need for critical thinking and empathy, workplace technology has increased the demand for these qualities. "We found that jobs that are very human-intensive are probably more robust," Loaiza said, highlighting the ongoing need for roles like early-education teachers, home health aides, and therapists.