AI Revolution Targets White-Collar Jobs While Blue-Collar Workers Remain Protected

While AI targets corner offices, hourly workers are left behind

We have reached the moment white collar workers have feared for months. Has AI finally come for my job? Companies like Salesforce claim they need fewer human employees to do the work AI can tackle, after laying off thousands. Klarna claims the company was able to shrink its headcount by about 40%, in part because of AI. Duolingo said last spring it will stop using contractors for work that AI can handle. Overall, companies have announced a staggering 700,000 job cuts in the first five months of 2025, an 80% jump from the previous year. The irony is almost poetic. For years, the tech industry assumed robots would come for factory workers first. Amazon's leaked documents once suggested the company could replace half a million warehouse jobs with automation. Instead, just weeks ago, Amazon laid off 14,000 middle managers while planning to hire 250,000 seasonal warehouse workers for the holidays. The AI revolution, it turns out, is hollowing out the corporate ladder before it touches the warehouse floor. The narrative around artificial intelligence and the job market is challenging for white-collar workers right now. Yet while Silicon Valley sends warnings over which desk jobs AI will consume next, we're missing an equally important question about the future of AI: What about everyone else? We are currently in an AI application bubble. The last few years of AI innovation have focused almost entirely on white-collar productivity: workplace efficiency tools, revenue-optimization platforms, and communication automation. Many of the major AI innovations from the past two years have been designed for someone working a 9-5 desk job from a laptop.

A.I. Leaders Warn Entry-Level White-Collar Jobs Are Being Automated Away

As A.I. accelerates, junior white-collar roles are disappearing faster than companies can adapt. The technology industry, once a landing pad for fresh computer science graduates, is rapidly automating away its early-career talent pipeline. A.I. coding tools like GitHub Copilot and Amazon CodeWhisperer now handle much of the entry-level work junior engineers once did, making it increasingly difficult for young professionals to break in. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters The impact isn't limited to computer engineers. Earlier this month, Anthropic CEO Dario Amodei offered a stark prediction on 60 Minutes, reiterating his belief that A.I. could replace half of all entry-level white-collar jobs within the next five years and push unemployment as high as 10 to 20 percent. "If we look at entry-level consultants, lawyers, financial professionals -- a lot of what they do, A.I. models are already quite good at," he said. "It's hard to imagine that there won't be some significant job impact there." Other A.I. and business leaders have echoed his concerns. Geoffrey Hinton, the "godfather of A.I.," has argued that "for mundane intellectual labour, A.I. is just going to replace everybody." Salesforce CEO Marc Benioff recently said A.I. already performs "close to half" of the company's workload. Ford CEO Jim Farley has warned that "A.I. will leave a lot of white-collar people behind," though he is more optimistic about blue-collar roles. He expects skilled workers in factories to become even more essential, as they provide "critically human support" in the context of automation. Several major studies support this trajectory. An August Goldman Sachs report warned that 6 to 7 percent of U.S. workers could lose jobs to A.I., particularly operational and support staff at large companies. Entry-level workers in tech remain the most affected, but hiring has also slowed in marketing, consulting, graphic design, office administration and call centers as businesses integrate new automation tools. A World Economic Forum study in January found that 41 percent of 1,000 surveyed global employers anticipate significant layoffs due to A.I. adoption. A recent Stanford study found that workers ages 22 to 25 in A.I.-exposed roles, especially in customer service and clerical work, have experienced a 13 percent decline in employment since 2022. In contrast, older workers in the same fields have had an easier time finding jobs. Other research suggests the downturn isn't driven by A.I. alone. Negative perceptions of Gen Z employees and broader economic uncertainty are also factors. A study from Hult International Business School found that 89 percent of employers avoid hiring new college graduates, and 39 percent would prefer to use A.I. over hiring a Gen Z worker. Even so, companies are not uniformly shrinking their workforces. Some are restructuring instead -- cutting traditional roles while adding new A.I.-specific ones. JPMorgan Chase CEO Jamie Dimon has said the bank's overall headcount will continue to grow as it hires workers to support A.I. development, despite reductions in operational positions. Walmart CEO Doug McMillon voiced a similar view at an event in September, saying, "It's very clear that A.I. is going to change literally every job." Walmart, he said, will both eliminate and create roles, with the aim of helping employees "make it to the other side." Ironically, while A.I. tools have increased the speed at which code can be generated, the durability of that code still depends on human expertise. A.I.-written code can be clumsy or brittle, and when complex systems break, engineers must know how to repair and refine them. Experienced engineers will still be needed to oversee A.I. systems, but even those roles could diminish, Amodei warned. "Eventually, all those little islands will get picked off by A.I. systems," he said on 60 Minutes. "And then, we will eventually reach the point where the A.I.s can do everything that humans can. And I think that will happen in every industry."