The rapid adoption of artificial intelligence across industries could significantly worsen employment prospects for young graduates, as companies increasingly rely on automation to boost productivity and cut costs.
Bill McDermott, chief executive of ServiceNow, warned that unemployment among recent college graduates could surge in the coming years as AI systems take over routine corporate tasks. Speaking on CNBC’s “Squawk on the Street,” he said the jobless rate for new graduates “could easily reach the mid-30 percent range within the next couple of years.”
Much of the change is being driven by the rise of AI “agents” capable of performing tasks once handled by entry-level employees, making it harder for young professionals to stand out in the workplace. “So much of the work is going to be done by agents,” McDermott said, noting that this shift may create new challenges for graduates trying to build careers in corporate environments.
Recent data suggests the labour market for young graduates is already showing signs of strain. According to the Federal Reserve Bank of New York, the unemployment rate for recent college graduates stood at around 5.7 percent at the end of 2025, while underemployment reached 42.5 percent, the highest level recorded since 2020.
Companies across the technology sector have been accelerating automation while reducing hiring. Payment firm Block recently announced plans to cut nearly half of its workforce as AI tools take over more operational functions. Meanwhile, software developer Atlassian said it would lay off about 10 percent of its employees as it shifts resources toward AI development, a move that comes amid investor concerns about industry disruption.
Technology leaders have increasingly acknowledged that artificial intelligence could reshape corporate hiring strategies. Alex Karp, head of Palantir Technologies, has previously said the company aims to grow revenue tenfold while reducing headcount, while Andy Jassy indicated that Amazon may gradually shrink parts of its corporate workforce as AI becomes more integrated into operations.
McDermott said AI-powered platforms are already transforming business processes. He noted that ServiceNow’s technology has eliminated roughly 90 percent of the customer service use cases that once required human intervention. According to CNBC, the company believes such tools will allow businesses to maintain stable staffing levels while boosting revenue and free cash flow.
Despite the benefits for corporate productivity, McDermott cautioned that the speed of AI adoption may outpace expectations. “I do think it’s coming quicker than people anticipate,” he said.
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