Massive migration to AI automation

Tasks traditionally completed by entry-level tech workers such as basic coding, testing, and data processing, are becoming increasingly automated, leading to reduced hiring for these roles. For instance, emerging evidence shows generative A November 2025 MIT study estimates that 11.7% of US jobs could already be automated using AI, with surveys indicating employers are eliminating entry-level positions due to this technology.

Companies skipping over juniors entirely

Tech companies are leveraging AI to increase senior level engineers productivity and to re-delegate tasks that would otherwise to go to Junior employees to the senior employees who now essentially have a free assistant. This rapid adoption of AI in replacement of employee’s has to lead to a 73% decline in entry-level hiring rates in the past year. Two-thirds of global organizations expect to slow entry-level hiring due to AI, with 71% anticipating difficulty in training future leaders as a result. This shift is exacerbated by a 67% collapse in junior developer hiring from 2024-2026, as firms prioritize immediate productivity over training.

Persistent layoffs & restructuring prioritizing AI over headcount expansion

Ongoing tech layoffs in 2026 are frequently attributed to AI-driven restructuring, with companies citing automation as a key factor in workforce reductions. AI was cited in nearly 55,000 announced US layoff plans in 2025, accounting for 4.5% of total cuts, often as part of broader restructuring. Goldman Sachs predicts AI will fuel another wave of job cuts in 2026 as firms accelerate automation for cost savings. In 2025, at least 122,000 tech industry layoffs were linked to AI, with restructuring accounting for 133,611 cuts overall.

Economic caution & macro factors suppress entry-level hiring

High interest rates, inflation, tariffs, and economic uncertainty are prompting companies to freeze or slow entry-level tech hiring, prioritizing cost control over expansion. Employers project only a 1.6% increase in hiring for the Class of 2026, with 66% planning cuts or freezes due to these factors. The US job market added fewer than 50,000 jobs monthly in 2025, down sharply, driven by interest rates, tariffs, and uncertainty suppressing activity. This "low-hire, low-fire" dynamic, influenced by immigration policies and economic headwinds, has hit young workers hardest, with entry-level unemployment rising.

Talent pipeline crisis & long-term structural shifts

AI's automation of entry-level tasks is disrupting traditional talent pipelines, creating shortages of future leaders and exacerbating skills gaps by 2030. Without entry-level roles, organizations risk a "seniority cliff" in 5-10 years, as juniors are needed to build experienced talent. AI could eliminate 50% of entry-level white-collar jobs by 2027, threatening internal pipelines and mentorship. Businesses racing to automate amid talent scarcity may displace workers faster than reskilling can respond, leading to uneven productivity and concentrated expertise gaps.