AI is cutting entry-level jobs fast, leaving new graduates with fewer white-collar options

Over three million students finished college in America this year, and they were expecting the usual shot at stable white-collar jobs. Instead, they’ve met hiring freezes, automated interviews, and closed doors, according to a survey by CNBC.

Employers across the U.S. are slashing entry-level roles, and AI is swallowing up tasks faster than career centers can print résumés.

The job market hasn’t looked this cold since the peak of the COVID-19 pandemic, and the next twelve months could get even worse, per the survey.

Employers are getting stingier, not because talent is lacking, but because they say machines are cheaper. Hiring managers now openly admit they’re using AI to cut costs and clean house. About 51% rated the job market for new grads as either “poor” or “fair,” which is the worst reading since 2020.

AI eliminates jobs faster than colleges can adapt

Joseph Fuller, who teaches management practice at Harvard Business School, said, “The pathways to get into certain careers are going to be narrower and the burden of credentials will be steeper.”

He believes AI has already made some popular skills useless, especially in roles that used to be stepping stones for fresh grads.

Entry-level job postings have already dropped by 35% since January 2023, based on research by Revelio Labs.

That leaves college grads stuck. The white-collar jobs they were trained for just aren’t there anymore. Challenger, Gray & Christmas reported 1.1 million layoffs this year, a 65% increase from last year. Tech companies led the bloodbath as they restructured departments and replaced people with automation.

Jobs in finance were next in line, since AI can now run numbers, crunch data, and do most of what analysts do. But roles in healthcare, construction, and factory work are more insulated, mostly because a robot still can’t change a bedpan or pour concrete.

The Federal Reserve Bank of Philadelphia backed up the trend with its own data. High-paying jobs that need a bachelor’s degree are way more likely to get hit by AI than blue-collar ones.

That’s made things even worse for the Class of 2025, who sent out more résumés than 2024 grads, but landed fewer offers. Cengage Group found that only 30% of them secured full-time work in their field. That’s a sharp drop from the 41% of last year’s graduates who got jobs.

Career offices scramble as parents question value of a degree

At Gettysburg College in Pennsylvania, employers that usually show up for career fairs didn’t even bother this year.

James Duffy, who oversees co-curricular education at Gettysburg, said, “If we look at the jobs that AI has absorbed … there are a number of jobs that students used to move right into. Some of those jobs are no longer available.”

Now that companies are cutting entry-level roles, colleges are being forced to rethink their playbooks.

They’re doing this at a time when trust in higher education is already sinking. Tuition keeps climbing, and student debt is swallowing people whole. A survey from EdAssist by Bright Horizons shows 77% of borrowers call their loans a “huge burden.”

Even worse, 63% don’t believe the degree was worth the stress. Duffy said families are now asking blunt questions about outcomes. “Parents want to know, ‘If I’m going to spend this money, where are they headed after four years?’”

He said his team is focused on loading students up with internships, externships, and hands-on work; anything that makes them less replaceable.

Fuller added that colleges need to start building co-op programs, or they’ll fall behind. But not every school has the network or budget. He warned that smaller, rural colleges like Gettysburg may end up falling behind bigger schools in cities that have more hiring pipelines. “It’s going to be helpful to be in a school with a fair amount of employment opportunities locally.”

Some are already making changes. The City University of New York rolled out a plan this July to revamp how its 180,000 students prepare for life after graduation.

The program includes career-connected advising, paid internships, apprenticeships, and direct collaborations with employers.

Félix Matos Rodríguez, the chancellor, said, “It’s not enough for students to graduate with a degree … they must leave with direction, preparation, experience, and connections.” He told CNBC that every student should either have a job in hand or a spot in grad school by the time they graduate. That’s the goal.

But getting there is still a long shot. Félix admitted no one has figured out how to measure success in this chaotic market. Fuller called out the elephant in the room: “Higher ed is singularly ill-equipped to deal with rapid change.”

Félix argued that schools need to speed up and get real about the job market. They need to guide students toward where AI is creating roles, not killing them. He said, “It shouldn’t be like higher ed failed because they weren’t able to read that crystal ball.”

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