ServiceNow CEO warns AI agents could drive graduate unemployment above 30% within years

ServiceNow CEO: AI could push grad jobless rate above 30%

McDermott argues digital workers will handle much of the grunt work once used to train junior staff Unemployment rates among recent graduates could climb above 30 percent because so many early career routine tasks will be performed by AI agents, ServiceNow CEO Bill McDermott has said. His views echo research findings that show organizations across the globe are slashing hiring for junior and entry-level positions. Speaking to CNBC, McDermott said it was natural to be concerned about jobs given the likely impact of AI agents on workforce planning and hiring, pointing to graduate unemployment rates, which sit at around 5.6 percent, according to recent data. "It could easily go into the mid-30s in the next couple of years. What's happening now is that for the non-differentiating roles, so much of the work is going to be done by agents. It's going to be challenging for young people to differentiate themselves in the corporate environment," he said. McDermott also claimed that ServiceNow's AI platform could handle 90 percent of the tasks that humans used to have to in customer service. He said companies such as Pepsi, Panasonic, and Nvidia were already using the platform. "That will definitely put a damper on how many people you need to hire," he opined. In October last year, a study from the British Standards Institution found young college grads are being hit hardest by AI adoption. The survey of business leaders from eight countries around the world - including the UK and US - found that 39 percent have already reduced junior and entry-level headcount in favor of greater AI adoption. Another 43 percent expect to further reduce entry-level roles in the next year in favor of AI and 50 percent "specifically" said AI is helping them reduce headcount. However, tech analyst group Gartner has warned that disproportionate cuts to graduate jobs could have a long-term impact on workforce structure. Highlighting the danger of "pipeline choke," Gartner pointed out that mundane bits of work on which junior staff once cut their teeth would no longer be available in the same numbers, reducing the supply of more experienced staff in years to come. "When a senior staff delegates to AI some of the work that juniors used to do... that approach captures value, but it can stall your growth, so pair it with a robust talent development strategy, or risk choking your future pipeline," said Gabriela Vogel, Gartner VP analyst. ®

ServiceNow CEO Predicts 30% College Grad Unemployment Due to AI | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Unemployment for new college graduates "could easily go into the mid-30s in the next couple of years," Bill McDermott, whose company offers an AI platform for employers, said in an interview Friday (March 13) with CNBC. "So much of the work is going to be done by agents," So it's going to be challenging for young people to differentiate themselves in the corporate environment," he added. The report noted that the Federal Reserve Bank of New York put the unemployment rate for recent college graduates at the end of 2025 at about 5.7%. New graduates also faced an underemployment rate of 42.5%, the highest level since 2020. Meanwhile, companies across industries are laying off workers and reducing costs thanks to new AI tools, CNBC added. Among them is Block, which announced last month that it plans to eliminate close to half its workforce amid greater AI automation. The report pointed to expert opinion arguing that, compared to past tech revolutions, AI is doing away with many white-collar jobs, including in the coding and marketing space, while letting businesses reduce hiring and boost productivity with fewer employees. McDermott told CNBC that his company's tools will help businesses cut hiring costs, adding that the software firm has already taken out 90% of the customer service use cases that had once relied on humans. "I do think it's coming quicker than people anticipate," he said. After the Block layoff news broke last month, PYMNTS wrote that while AI-related job cuts invariably lead to fears of a larger employment crisis, current labor research shows a more complicated picture. That report cited findings from the World Economic Forum which contended that while automation and AI will some certain tasks, they will also bring about new categories of work, especially in data, AI oversight, cybersecurity and human-centric services. The report stresses transition rather than permanent contraction. A large portion of workers' skills are expected to evolve over the next five years, which will require retraining and adaptation. "The pressure is real, but it is directional. Roles centered on routine information processing are most exposed. Roles combining domain expertise, judgment and technological fluency are expanding," PYMNTS added. PYMNTS CEO Karen Webster has argued that 2026 will be the year AI in which adoption shifts from experimentation to operational reality. "Instead of pilot projects and chat interfaces, companies are embedding AI into payments flows, customer engagement systems and enterprise software stacks," the report said. "Once intelligence is part of the infrastructure, it reshapes the organization itself."