Big Tech Is Slashing Entry-Level Jobs, But At the Expense of Future Growth

Today’s job market is characterized by companies hitting pause on entry-level hiring in light of efficiency and cost-cutting efforts. On paper, this looks like a rational response to economic uncertainty and the overabundance of artificial intelligence-powered productivity tools.

However, this freeze is merely creating a “false calm” in the labor market. The latest JOLTS data shows roughly 7.2 million open positions, but hiring isn’t actually keeping pace. In a “low-hire, low-fire” job market, churn is down, and early-career job creation is slowing dramatically.

This illusion of stability hides a deeper, more complex detriment. When companies trim junior roles, they reduce expenses in the short term but simultaneously choke off the talent pipelines.

Considering entry-level jobs are the foundation where workers develop skills and leadership potential, locking them away compromises companies’ long-term growth and sustainability.

A growing body of research shows that the downturn in early-career hiring is steepening. According to new Allwork.Space survey data, Big Tech and other large employers have dramatically reduced new grad recruitment throughout 2024 and 2025.

Zeroing in on tech, entry-level jobs in software development are among the hardest-hit, dropping from 43% to 28% in less than a decade. Data analysis, which is also increasingly becoming an AI-driven field, also saw a decrease from 35% to 22%.

Meanwhile, a different report by the United Kingdom’s National Foundation for Education found a nearly 50% decline in the number of job postings for core tech roles like programmers, software developers, and IT managers—with junior positions seeing fewer openings.

The consequences are already visible. A previous article based on the U.S. Bureau of Labor Statistics research reported a sharp rise in unemployment among college graduates, who now make up a third of the long-term unemployed.

CNBC has similarly highlighted how AI-driven restructuring is making it even harder for new grads to get a foot in the door. About half (51%) of employers rated this year’s job market for college seniors and grads as poor, with the effects most palpable in fields like tech, analytics, and operations.

Wherever you look, there’s no denying that the roles lost on the bottom rung aren’t simply replaced one-for-one even as AI helps create new jobs. This erosion of early-career opportunities may be technologically efficient now, but is actually economically self-defeating, as the next section explores.

The biggest risk goes beyond unemployment statistics, as the loss of junior talent affects what happens inside organizations.

A Korn Ferry–supported BambooHR report found that roughly 37% of companies are already replacing entry-level positions with AI tools. Although this shift may solve short-term productivity and cost concerns, it otherwise heightens long-term leadership risks.

For one, entry-level employees aren’t hired just to complete simple tasks. They absorb institutional knowledge, observe how decisions get made, and grow into roles that shape company strategy, culture, and resilience. When these apprenticeships vanish, so does the internal knowledge transfer that creates nuances on why things are done a certain way and sustains high-performing organizations altogether.

The report also refers to this trend as a “self-inflicted talent drought”. Without junior employees learning from senior ones (and eventually replacing them), organizations risk hollowing out their own talent ecosystems.

Tech reporting from the Times of India further reinforces this global trend, as computer science graduates enter one of the toughest entry-level markets in decades. This doesn’t just affect their individual careers, but also the talent pipeline. If there’s no fresh tech talent learning, adapting, and innovating, it raises red flags about the future depth of the tech workforce.

What employers should note is that while they freeze hiring, Gen Z is already moving on. According to freelance services platform Fiverr’s Next Gen of Work Report, 67% of Gen Z workers say “income stacking”, combining freelancing, gig work, and part-time jobs, is essential to their career strategy.

While it may not be the traditional career path, it’s a way for the new generation of workers to build multiple income streams instead of waiting for employers to open their doors to entry-level, full-time jobs.

They’re also using AI as a force multiplier, enabling them to manage client work, automate tasks, and scale independent careers in ways older generations couldn’t. As younger workers restructure how they engage their work, employers must heed it as a warning.

When ambitious young workers build their careers elsewhere, companies don’t just lose potential employees. They lose future leaders, evangelists, mentors, and customers.

By freezing entry-level jobs, companies think they are saving money. In reality, they are pushing an entire generation to innovate without them, jeopardizing their own future in the process.