AI's Impact on the Workforce: Novices vs. Experienced Professionals

Tech layoffs show AI's impact extends beyond entry-level roles

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. In a nutshell: The rapid advance of artificial intelligence is redrawing the boundaries of white-collar employment, leaving both novice and seasoned professionals uncertain about their future in the workforce. However, experts are divided over which group faces the greatest risk. Some within the industry, like Dario Amodei of Anthropic, argue that entry-level positions are most susceptible because their tasks are more easily automated. Amodei said that AI could "cannibalize half of all entry-level white-collar roles within five years." Rising unemployment among recent college graduates has added fuel to these concerns, though the causes remain debated. Others see a different threat emerging for more experienced workers. Brad Lightcap, chief operating officer of OpenAI, told The New York Times that AI could challenge "a class of worker that I think is more tenured, is more oriented toward a routine in a certain way of doing things." The implications of this shift are significant: if mid- and late-career professionals are displaced, the effects could ripple through the economy and even destabilize political systems. Data from sectors that have already embraced AI suggest that entry-level workers are feeling the brunt of the change. Payroll processor ADP reports that employment for workers with fewer than two years of tenure in computer-related fields peaked in 2023 and has since declined by about 20 to 25 percent. Customer service roles show similar patterns. Yet, according to Stanford researcher Ruyu Chen, employment for workers with greater tenure has increased in these same sectors. Research also indicates that AI is transforming the nature of jobs, sometimes to the advantage of more experienced staff. When Italy temporarily banned ChatGPT in 2023, researchers found that while junior coders used AI to complete tasks more quickly, midlevel coders leveraged it to support their teams and manage projects in unfamiliar programming languages. "When people are really good at things, what they end up doing is helping other people as opposed to working on their own projects," said Sarah Bana, one of the study's authors. She noted that AI amplified this tendency, potentially leading companies to hire fewer junior coders but more midlevel ones. Still, the risk to experienced workers is real. Danielle Li, an economist at MIT, explained that AI can "untether valuable skills from the humans who have traditionally possessed them. That state of the world is not good for experienced workers. You're being paid for the rarity of your skill, and what happens is that AI allows the skill to live outside of people." Li also suggested that the rise in unemployment among new graduates may reflect employers' expectations of needing fewer workers overall, not just at the entry level. Some law firms and technology companies have already reduced their reliance on experienced professionals. Robert Plotkin, a partner at a law firm specializing in intellectual property, said his firm now uses about half as many contract lawyers as before the advent of generative AI. "I've become very efficient at using AI as a tool to help me draft applications in a way that's reduced our need for contract lawyers," Plotkin said. Major technology firms have also made cuts that affect experienced employees. Google, Meta, and Microsoft have all conducted layoffs since 2022, with Microsoft's recent rounds including many middle managers and software developers. "Anything that is administrative, spreadsheet-related, where there's an email trail, a document-management type activity, AI should be able to perform fairly easily, freeing up time for managers to do more mentoring," said David Furlonger, a vice president at Gartner. "CEOs are implying in the data that we don't need as many of them as we did previously," he said. The motivations behind these layoffs are multifaceted. Gil Luria, an equity analyst at D.A. Davidson, said companies are cutting costs to maintain profit margins while investing heavily in AI infrastructure. He noted that software engineers at all levels are vulnerable, particularly those with higher salaries who resist adapting to new technologies. "There are senior people who have figured out how to get leverage out of AI and senior people who are insistent that AI can't write code," Luria said. Harper Reed, chief executive of 2389 Research, said that experienced coders with higher salaries and a reluctance to embrace AI are at risk. "How you decrease cost is not by firing the cheapest employees you have," Reed said. "You take the cheapest employee and make them worth the expensive employee." Studies suggest this is possible: recent research found that AI coding assistants increased the productivity of junior developers more than that of their experienced colleagues. Reed explained that it may soon be financially logical for companies to hire junior employees who use AI to perform what was once mid-level work, with a handful of senior staff overseeing them and almost no middle-tier employees. That, he said, is essentially how his company is structured.

Opinion | AI is coming for entry-level jobs. Everybody needs to get ready.

AI may replace a lot of entry-level skills. So how will workers acquire more advanced ones? Is the great AI disruption happening? Have we reached the point where AI starts displacing lots of workers? AI watchers know to ask these questions as jobs numbers roll in -- but no one knows when they will be answered and what the jobs market will look like when they are. Certainly, CEOs are saying that AI is coming for a lot of jobs, and soon -- perhaps as many as half of all white-collar workers. That's likely to show up first in entry-level jobs, where the basic skills required are the easiest to replicate, and in tech, where the ability to rapidly adapt the latest software tools is itself an entry-level job requirement. Sure enough, in recent years unemployment has risen fastest among new college graduates, which spurred LinkedIn executive Aneesh Raman to write that the bottom rungs of the white-collar career ladder are "breaking." As Raman concedes, however, "we haven't yet seen definitive evidence that A.I. is the reason for the shaky entry-level job market." An analysis by the Economist suggests that the "relative unemployment" of young college graduates -- the ratio of their unemployment rate to the general jobless figures -- began rising in 2009, well before the first chatbots were released. Nor has there been any appreciable decline in the share of workers doing office jobs. So, no, it may not be happening yet -- at least not enough to leave definite patterns in the economic data. But if CEOs driving this change are to be believed, it is likely to eventually. Yet it doesn't have to be a disaster. Educators, CEOs and policymakers should start thinking now about what will replace the entry-level job -- not just for the workers who need a way to support themselves, but for the companies who will still need skilled mid- and high-level employees long after AI has automated away data entry and basic report-writing. Those workers, in turn, will need the human capital that is typically acquired by laboring in the trenches. That includes obvious things such as technical skills, knowledge of their industry and a professional network, but also a lot of tacit knowledge that is absorbed by watching your elders work and hearing their war stories: What are the most common pitfalls in our industry? Where are the ethical gray areas, and how do we resolve questions that fall into them? What does good management look like? What's the best way to handle conflicts with difficult co-workers? How should we balance competing priorities? None of this can be taught by a book, or by a LLM course. This know-how is transmitted human to human, in real time and in real life. Until now, that hasn't been a problem, because young employees doing grunt work picked up human capital along with their paycheck. AI disruption threatens that process. Entry-level workers' paychecks will be the first and most obvious casualties, but companies will feel the disruption soon enough as they try to hire the next generation of skilled mid-level workers and realize the economy has stopped cultivating them. If they are wise, they will look beyond the dazzling immediate possibility of smaller payrolls and think about developing the talent they'll need to stay competitive in the future. A brand-new talent pipeline will not be built by editorialists or researchers sitting in their offices, spinning out theoretical possibilities. Bosses who know what they need the pipeline to deliver and are willing to endure some patient trial and error to get it working, will construct it. As they work, however, they should partner with the operators of one of our biggest existing pipelines, the American university system. Universities have been successfully delivering fresh talent to companies for decades. Now, in the face of AI, they need to reimagine what they do. This doesn't just mean fighting chatbot-enabled cheating. The bigger threat to the higher education system as we know it is that many of the skills colleges develop, such as the ability to do basic research or write coherent prose, will be devalued in the job market as AI takes over. On the other hand, other skills universities cultivate -- such as critical thinking and analysis of text -- could empower graduates to use and evaluate AI tools. A job credential is not the only reason to pursue higher education. But the wage premium for college graduates is why so many people have been willing to pay steadily increasing tuition to secure one. In 1940, fewer than 5 percent of Americans had completed a college degree. By 2017, that figure had expanded to a third of the population. That shift didn't just benefit the students who enhanced their intellectual capacities and their earning power; it also enabled a massive expansion of the higher education system and its other, nonpecuniary missions, such as developing engaged citizens and preserving and extending human knowledge. Those missions will be threatened unless universities can figure out how to teach different skills, ones that AI can't master. Otherwise, the value of a college diploma will fall, and many schools will close. It's lucky, then, that the great AI disruption hasn't happened -- yet. Schools and employers still have some time to figure out how to rebuild the talent pipeline for the 21st century. But they need to start planning now, because the investment in AI and user take up of the technology is happening on an astonishing scale and at blistering speed.

Which workers will AI hurt most: The young or the experienced? - The Economic Times

AI is reshaping the white-collar workforce, with debate over whether junior or senior employees are most at risk. While entry-level roles are easier to automate, experienced workers with high salaries and slower AI adoption may also face displacement. Companies are increasingly using AI to boost productivity and cut mid-level roles.When Amazon CEO Andy Jassy wrote last month that he expected the company's use of artificial intelligence to "reduce our total workforce" over the next few years, it confirmed the fear among many workers that AI would replace them. The fear was reinforced two weeks later when Microsoft said it was laying off about 9,000 people, roughly 4% of its workforce. That AI is poised to displace white-collar workers is indisputable. But what kind of workers, exactly? Jassy's announcement landed in the middle of a debate over just this question. Some experts argue that AI is most likely to affect novice workers, whose tasks are generally simplest and therefore easiest to automate. Dario Amodei, CEO of the AI company Anthropic, recently told Axios that the technology could cannibalize half of all entry-level white-collar roles within five years. An uptick in the unemployment rate for recent college graduates has aggravated this concern, even if it doesn't prove that AI is the cause of their job-market struggles. But other captains of the AI industry have taken the opposite view, arguing that younger workers are likely to benefit from AI and that experienced workers will ultimately be more vulnerable. In an interview at a New York Times event in late June, Brad Lightcap, the chief operating officer of OpenAI, suggested that the technology could pose problems for "a class of worker that I think is more tenured, is more oriented toward a routine in a certain way of doing things." The ultimate answer to this question will have vast implications. If entry-level jobs are most at risk, it could require a rethinking of how we educate college students, or even the value of college itself. And if older workers are most at risk, it could lead to economic and even political instability as large-scale layoffs become a persistent feature of the labor market. David Furlonger, a vice president at the research firm Gartner who helps oversee its survey of CEOs, has considered the implications if AI displaces more experienced workers. "What are those people going to do? How will they be funded? What is the impact on tax revenue?" he said. "I imagine governments are thinking about that." Is AI making better managers? Economists and other experts who study AI often draw different conclusions about whom it's more likely to displace. Zooming in on the fields that have deployed AI most widely thus far tends to paint a dire picture for entry-level workers. Data from ADP, the payroll processing firm, shows that in computer-related fields, employment for workers with less than two years of tenure peaked in 2023 and is down about 20% to 25% since then. There is a similar pattern among customer service representatives, who are increasingly reliant on AI as well. Over the same period, employment in these industries has increased for workers with two or more years of job tenure, according to Ruyu Chen, a Stanford University researcher who analyzed the data. Other studies point in a similar direction, if in a roundabout way. In early 2023, Italy temporarily banned ChatGPT, which software developers there relied on to help them code. A team of researchers at the University of California, Irvine, and Chapman University compared the change in the productivity of Italian coders with the productivity of coders in France and Portugal, which did not ban the software, to isolate the impact of ChatGPT. While the study did not look at job loss, it did find that the AI tool had transformed the jobs of midlevel workers in more favorable ways than the jobs of entry-level workers. According to the researchers, the junior coders used AI to complete their tasks somewhat faster; the experienced coders often used it to benefit their teams more broadly. For example, the AI helped midlevel coders review the work of other coders and suggest improvements, and to contribute to projects in languages they didn't know. "When people are really good at things, what they end up doing is helping other people as opposed to working on their own projects," said Sarah Bana, one of the paper's authors, adding that the AI essentially reinforced this tendency. Bana said the paper's result suggested that AI would prompt companies to hire fewer junior coders (because fewer would be needed to complete entry-level tasks) but more midlevel coders (because AI amplified their value to their whole team). On the other hand, Danielle Li, an economist at the Massachusetts Institute of Technology who studies the use of AI in the workplace, said there were scenarios in which AI could undermine higher-skilled workers more than entry-level workers. The reason is that it can, in effect, untether valuable skills from the humans who have traditionally possessed them. For instance, you may no longer have to be an engineer to code, or a lawyer to write a legal brief. "That state of the world is not good for experienced workers," she said. "You're being paid for the rarity of your skill, and what happens is that AI allows the skill to live outside of people." Li said AI would not necessarily be good for less experienced workers, either. But she speculated that the uptick in unemployment for new college graduates resulted from employers' expectations that they will need fewer workers overall in the age of AI, not just fewer novice workers. An overall hiring slowdown can have a bigger impact on workers right out of college, since they don't have a job to begin with. Robert Plotkin, a partner in a small law firm specializing in intellectual property, said AI had not affected his firm's need for lower-skilled workers like paralegals, who format the documents that his firm submits to the patent office. But his firm now uses roughly half as many contract lawyers, including some with several years of experience, as it used a few years ago, before the availability of generative AI, he added. These more senior lawyers draft patent applications for clients, which Plotkin then reviews and asks them to revise. But he can often draft applications more efficiently with the help of an AI assistant, except when the patent involves a field of science or technology that he is unfamiliar with. "I've become very efficient at using AI as a tool to help me draft applications in a way that's reduced our need for contract lawyers," Plotkin said. Some of the companies at the cutting edge of AI adoption appear to have made similar calculations, laying off experienced employees rather than simply hiring fewer entry-level workers. Google, Meta and Amazon have all done layoffs since 2022. Two months before its most recent layoff announcement, Microsoft laid off 6,000 employees, many of them software developers, while the July layoffs included many middle managers. "Anything that is administrative, spreadsheet-related, where there's an email trail, a document-management type activity, AI should be able to perform fairly easily, freeing up time for managers to do more mentoring," said Furlonger, the analyst at Gartner, whose survey recently included questions about AI. "CEOs are implying in the data that we don't need as many of them as we did previously." The value of inexperience Gil Luria, an equity analyst who covers Microsoft for the investment bank D.A. Davidson, said one reason for layoffs was that companies like Microsoft and Google were cutting costs to prop up their profit margins as they invested billions in chips and data centers to develop AI. But another reason is that software engineers are susceptible to replacement by AI at all skill levels -- including experienced engineers who make a large salary but are reluctant to embrace the technology. Microsoft "can do math quickly -- see who's adding value, who's overpaid, who's not overpaid, who's adapting well," Luria said. "There are senior people who have figured out how to get leverage out of AI and senior people who are insistent that AI can't write code." Harper Reed, CEO of 2389 Research, which is building autonomous AI agents to help companies perform a variety of tasks, said the combination of higher salaries and a reluctance to embrace AI was likely to put the jobs of experienced coders at risk. "How you decrease cost is not by firing the cheapest employees you have," Reed said. "You take the cheapest employee and make them worth the expensive employee." A number of studies have suggested that this is possible. In a recent study by researchers at Microsoft and three universities, an AI coding assistant appeared to increase the productivity of junior developers substantially more than it increased the productivity of their more experienced colleagues. Reed said that from a purely financial perspective, it would increasingly make sense for companies to hire junior employees who used AI to do what was once midlevel work, a handful of senior employees to oversee them and almost no middle-tier employees. That, he said, is essentially how his company is structured.