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Is AI Replacing Entry-Level Jobs? 37% of Hiring Professionals Say It's Already Reducing Demand

Is AI replacing entry-level jobs? 37% of hiring professionals say AI is reducing their need for junior hires. Here's what Criteria's data and new research show.

ByTalent Signal News Editorial

Oct 12, 2026

More than a third of hiring professionals (37%) say AI may be reducing their need for entry-level hires, according to Criteria's 2026-2027 Hiring Benchmark Report, and the figure rises to 65% in tech. Employers that already use AI in hiring are more than twice as likely to report the drop. Government and academic research shows early-career employment slipping in the occupations most exposed to AI, while other data finds heavy AI adopters still adding junior staff. The evidence as a whole points to AI changing which entry-level roles exist and what they demand, with the sharpest effects concentrated in specific industries.

The question of whether AI is taking entry-level jobs has mostly been debated using economists' data and executives' forecasts. Criteria's 2026-2027 Hiring Benchmark Report adds the view of the people who make those hires. In a survey of 1,027 U.S. hiring professionals released Oct. 6, 37% said AI may be reducing their organization's need for entry-level workers, including 65% of those in tech.

The pattern tracks closely with AI adoption. Organizations that already use AI in their own hiring were more than twice as likely as non-users to say their entry-level needs have dropped. Fifty-six percent of respondents now use AI somewhere in the hiring process, and tech leads all industries at 87%.

"AI is reshaping both sides of the talent equation simultaneously, and hiring professionals are navigating that in real time," Josh Millet, Criteria's co-founder and CEO, said in the announcement of the report.

What the data shows

Early-career employment is falling where AI exposure is highest

Criteria's findings line up with the most widely cited research on the question. Stanford economists Erik Brynjolfsson, Bharat Chandar and Ruyu Chen found that workers aged 22 to 25 in the most AI-exposed occupations saw a 13% relative decline in employment after generative AI tools spread, while older workers in the same jobs held steady.

Government data now points the same direction. Two U.S. Census Bureau working papers, reported by Fortune in September, found that early-career employment in the most AI-exposed fifth of industries fell 12% in the ten quarters after ChatGPT's release. Graduates of the most AI-exposed college majors were 5 percentage points less likely to have a job one quarter after graduating, and their first earnings were 13% lower. Co-author Lee Tucker told Fortune that "the decline in hires is the primary cause."

The unemployment rate for recent college graduates stood at about 5.6% in the second quarter of 2026, well above the 4.2% rate for all workers, and 42% were working in jobs that typically don't require a degree, according to the Federal Reserve Bank of New York.

The heaviest AI adopters are still hiring junior staff

Not every study finds employers pulling back. A working paper from Ramp's economics lab and Revelio Labs that tracked 21,559 firms found that heavy AI adopters grew headcount by 10.2% over the following two years and increased entry-level headcount by 12%, as Talent Signal News reported in July.

The National Association of Colleges and Employers also sees employers holding onto graduate hiring. In April, NACE projected that employers would hire 5.6% more members of the Class of 2026 than the year before. In a separate NACE survey, just over a quarter of employers said AI had reduced the tasks given to entry-level workers, more than half said it had not, and only 11% were discussing AI replacing some positions. Mary Gatta, NACE's director of research and public policy, described the data as showing AI largely reshaping early-career work rather than replacing it.

Reconciling the two

The two sets of findings measure different things. The steepest declines in the Census and Stanford research show up in the occupations and industries most exposed to AI, including software development and customer service in the Stanford study, which is consistent with Criteria's 65% figure for tech. Firms that invest heavily in AI may also be growing fast enough overall to keep adding junior people, even as the work those people do changes. NACE president Shawn VanDerziel has cautioned that "it is too early to tell what the long-term impact of AI will be on early career talent."

Hiring professionals in Criteria's survey are describing a shift in demand. AI now handles many of the routine tasks that once justified an entry-level role, and employers are rethinking which junior positions they need and what those hires must be able to do.

How entry-level hiring is changing

Employers want different skills from junior hires

As AI absorbs routine tasks, the entry-level roles that remain call for more judgment, communication and reliability from day one. Hiring professionals in Criteria's survey do not believe new graduates are arriving with those qualities. Four in five see a mismatch between the skills new graduates have and the skills employers need, and work ethic tops the list of gaps at 67%, ahead of communication, professionalism and technical or digital skills. Only 16% of employers consider Gen Z well prepared for the workplace.

AI fluency is becoming part of the job description as well. In NACE's research, 28% of employers said they are looking for early-career hires who can use AI, and nearly 60% give interns projects that involve it.

The pipeline problem

Fewer junior roles create a longer-term risk for employers. Entry-level positions are where companies have traditionally trained the people who later fill mid-level and senior jobs, and a smaller intake today means a thinner bench in five or ten years. It is one reason upskilling current employees tied for the top hiring priority for 2027 in Criteria's report. Companies that hire fewer juniors will need to develop more of their future talent from within.

It also changes how employers should evaluate the junior candidates they do hire. Graduates have little work history to judge, and AI-polished resumes make applicants harder to tell apart. Millet has argued that hiring should weigh adaptability and growth potential over credentials, and cognitive and behavioral assessments give employers a way to measure those traits directly in candidates without a track record.

What it means for graduates

For job seekers, the shift raises the value of being able to demonstrate ability. Sixty-eight percent of job seekers in Criteria's 2026 Candidate Experience Report said they would be open to dropping the resume altogether, and skills assessments, structured interviews and work samples give early-career candidates a way to show what they can do beyond a list of internships. Graduates who can use AI well, and who show the work ethic and communication skills employers say are missing, will have an advantage in a market with fewer openings at the bottom rung.

FAQ

Is AI replacing entry-level jobs?

In some industries, AI is reducing demand for entry-level workers. In Criteria's 2026-2027 Hiring Benchmark Report, 37% of hiring professionals said AI may be reducing their need for entry-level hires, including 65% in tech. Census Bureau and Stanford research show early-career employment falling in the occupations most exposed to AI. Across the broader economy, however, many employers are still hiring graduates, and AI is more often changing junior roles than eliminating them.

Which entry-level jobs are most affected by AI?

The largest effects show up in occupations with a high share of routine, text-based or analytical tasks that AI can perform, including software development and customer service. Tech employers in Criteria's survey were the most likely to report reduced entry-level need.

Are companies that use AI hiring fewer junior employees?

The evidence is mixed. In Criteria's survey, organizations that use AI in hiring were more than twice as likely to say their entry-level needs had dropped. A study by Ramp and Revelio Labs, however, found that the heaviest AI adopters increased entry-level headcount by 12% over two years.

What is the unemployment rate for recent college graduates?

About 5.6% in the second quarter of 2026, according to the Federal Reserve Bank of New York, compared with 4.2% for all workers. Forty-two percent of recent graduates were underemployed.

What skills do employers want from entry-level hires?

Employers in Criteria's survey named work ethic as the biggest gap among new graduates (67%), followed by communication, professionalism and technical or digital skills. A growing share of employers also want early-career hires who can use AI tools.