AI hiring shifts dramatically as 43% of CEOs plan to cut junior roles, favoring older workers

The Young Are Being Battered by AI as Hiring Shifts to Older Workers

Job prospects for early-career workers took a turn for the worse last year. In the first quarter of the year, the job market for 22-to-27-year-olds "deteriorated noticeably," according to a New York Fed report. Later, Fed Chair Jerome Powell admitted that AI might be partly to blame. Companies that would have ordinarily hired recent graduates are now increasingly trying to have AI assistants automate that work, Powell explained. By the end of the year, the job market for these young workers was at its harshest since the worst days of the pandemic. Now, a global survey of CEOs by consulting firm Oliver Wyman indicates that things could get even worse over the next two years. According to the survey, the share of CEOs saying that they were looking to reduce junior roles over the next year or two doubled to 43% from 17% just last year. Only 17% of CEOs said they are shifting hiring to focus on more junior positions. Instead of young workers, executives are increasingly focusing on hiring older workers. Roughly 30% of respondents said they are shifting hiring to more mid-level roles, up from only 10% last year. The change is AI-driven, the report concludes. "Notably, the CEOs with the longest planning horizons are the most likely to plan headcount reductions," the report said. "That suggests they expect a structurally leaner organization not as a cost measure but as the destination â€" the endpoint of an AI-augmented operating model that requires fewer people, deployed differently." AI was a top-three priority for most CEOs, and more than 90% said they are deploying AI in their companies, though 67% are still at the planning or pilot stages. Artificial intelligence in its current state is best at automating tasks that an early-career worker could be expected to perform at a company, making this demographic particularly vulnerable to AI-driven cost-cutting initiatives. Despite the widely held belief among top-level executives that AI will be so transformative that a lot of white-collar work can be automated away in the near future, the majority don't actually see a substantial return on their AI investments. More than half of respondents said it was still too early to assess whether this AI deployment is actually returning the promised productivity gains. Only 27% of CEOs said the return on AI investment had actually met or exceeded expectations, down from 38% just a year ago, and nearly a quarter said they had seen absolutely no impact on revenue. This is "not a crisis of confidence," the report suggests, but "a recognition that redesigning work at scale is slower and more difficult than early enthusiasm suggested." Interestingly enough, the handful of executives who lead companies that are actually seeing a return on investment from AI reported a relatively higher rate of shift towards junior workers than those who are not seeing returns, even though the majority still preferred mid-level employees over juniors. "A contrarian subset of the most advanced AI adopters see the technology increasing the value of entry-level talent rather than replacing it," the report says. Though mid-level employees seem better off than younger workers in this new equation, the overarching trend is still a shift away from hiring. The survey showed that 74% of CEOs are either freezing or reducing headcount, up from 67% last year. The most aggressive cuts are taking place in the tech, media and telecommunications sectors. These AI-driven headcount reduction initiatives could prove to be more risky in the long term, though. "Headcount reduction that outpaces meaningful AI deployment can leave organizations exposed, and overreliance on systems that are still maturing introduces its own vulnerabilities," the report says. One particularly tricky aspect is the trend seen with younger workers. Less hiring of early-career workers means that these AI-exposed industries are giving fewer opportunities for on-the-job training and career growth to younger workers. That's potentially catastrophic not only for these 20-somethings but also for the future of the workforce, which, according to this survey, is going to be dominated by mid-level employees. As companies are shifting away from giving opportunities to junior employees to cut costs, they are simultaneously jeopardizing their talent pipeline.

'Today's disruptive environment is anything but normal': Report warns younger workers set to be hit by AI hiring as bosses focus more on midlevel roles

* Younger workers hardest hit by job layoffs, study finds * Tech sector particularly affected, with AI bringing big changes * Businesses look to hire older workers, "turning talent pyramids into diamonds" Younger workers and those looking to enter the workforce could soon struggle even more to find a job as bosses increasingly turn to AI tools for entry-level tasks, new research has warned. The global CEO study by consulting firm Oliver Wyman found employers are set to focus on hiring for more senior roles, even as most plan to keep staff levels as they are, or even lay off workers. Instead, AI assistants, agents and chatbots will be used to complete those basic or menial jobs which until now have been the learning fodder for new workers. Job struggles Overall, it was bad news for the technology sector, which the report found was the hardest hit by global job cuts, as nearly three-quarters (74%) of CEOs said they are either freezing or reducing headcount, up from 67% the previous year. Bigger companies were more likely to make cuts, the study found, with 39% of "mega-size" companies planning reductions versus 28% of smaller ones. And younger workers are taking the brunt of the punishment, as the number of CEOs saying junior roles are set to be reduced over the next year or two has doubled (to 43% from 17%) since 2025 - and shockingly, only 17% of CEOs said they would be shifting focus to hire more junior positions. Instead, CEOs are looking to hire older workers, the report found, with around 30% saying they are shifting hiring to more mid-level roles - up from only 10% the previous year - turning the "talent pyramids into diamonds", the report says. So is AI to blame? The study found, perhaps unsurprisingly, that the technology was a major priority for most CEOs, as more than 90% said they are deploying AI in their companies - with over two-thirds (67%) still at the planning or pilot stages. "Notably, the CEOs with the longest planning horizons are the most likely to plan headcount reductions," the report says. "That suggests they expect a structurally leaner organization not as a cost measure but as the destination -- the endpoint of an AI-augmented operating model that requires fewer people, deployed differently." "But this calculus carries risk," it adds, "Headcount reduction that outpaces meaningful AI deployment can leave organizations exposed, and overreliance on systems that are still maturing introduces its own vulnerabilities. The harder question -- one with which many CEOs are still grappling -- is what their talent pipeline and company culture will look like in three years if the investment in junior employees is not made today." Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

AI poised to tilt job market leverage toward older workers | Fortune

When it comes to job cuts, older workers are often disproportionately affected. But a new survey of chief executive officers suggests this won't be a given as companies adopt artificial intelligence. More than 40% of CEOs plan to cut junior roles over the next one to two years and shift the composition of their workforce toward mid-level or senior positions, while only 17% plan to make junior roles a bigger part of the mix, according to a global survey by Oliver Wyman. The numbers are essentially flipped from just a year ago. "I think the junior level is definitely finding it harder now to enter the workforce," said John Romeo, who leads the consulting firm's research arm, the Oliver Wyman Forum. "It's those mid- and senior-level employees that CEOs are now looking at to drive productivity." That's because of the types of tasks that AI agents are able to perform, from writing code at the level of a junior developer to evaluating sales leads. What the agents can't do in many fields is make judgment calls using the insight that comes from on-the-job experience, according to labor experts. Companies are saying, "I need someone who's actually done this before because her experience, her wisdom, her critical thinking and the fact that she solved these problems makes her much more valuable," said consultant and lecturer Ravin Jesuthasan, who has written multiple books on the future of work. The Oliver Wyman survey results build on findings from a Harvard University study showing that firms adopting generative AI have significantly reduced junior-level positions, while keeping senior employment largely stable. Foregoing younger talent now in favor of AI agents comes with significant risks, though, as it may leave companies with a shortage of experienced workers in the future, according to Helen Leis, global head of leadership and change at Oliver Wyman. To "have the mid-level people that can manage an agentic workforce, they need to learn the company and the job," Leis said. With that idea in mind, International Business Machines Corp. said in February that it plans to triple entry-level hiring in the US this year and will rewrite job descriptions for the AI era. IBM appears to be an outlier, though. A study from Stanford University in November found that young workers were 16% more likely to lose their jobs in the most AI-exposed fields. But even if AI is tipping the scales in the job market toward older workers, it's no guarantee of job security for them. "Firms' commitment to workers is weaker and weaker," said Teresa Ghilarducci, a labor economist at the New School.