As Jobs for New Grads Vanish, Execs Say AI Is Filling the Gap

It seems clear that AI is having an impact on the jobs market, mainly in the technology sector, and mostly impacting entry-level positions. A new report from Goldman Sachs confirms and expands on this trend, and also sketches out a near future where companies will see their productivity grow mainly thanks to improving AI tech, with only a small contribution from increasing their headcount. This is a “jobless growth” situation, Goldman economists David Mericle and Pierfrancesco Mei wrote in an investor note this week.

What Mericle and Mei actually predicted was “modest job growth” in the coming years, even as the economy sees “robust GDP growth.” This disparity implies that the solid increases in productivity aren’t coming from more and more people entering the workforce — instead something else will drive up companies’ output, and that something is AI. As to why there will only be “modest” labor supply rises, the economists suggest it’s a mix of “population aging and lower immigration,” Fortune reported.

The other effect the report highlights is that while we’re seeing AI impact certain jobs, the bigger impacts and long-term structural changes to the job market won’t really be visible until a recession hits. In a poor economic environment where cost cutting gets prioritized, “companies use recessions to restructure and streamline their workforce by laying off workers in less productive areas.”

But we’ll also see AI hitting jobs more in the near future too — Fortune notes that the share of company leaders mentioning “both AI and employment in the same context on earnings calls,” has reached “historic highs.” Given that the modern AI era, kicked off by OpenAI’s ChatGPT, is really only a handful of years old, the use of “historic” may be overblown here. 

Or maybe not. Bloomberg reports that Goldman Sachs told its own staff this week that they can expect to see another round of layoffs, driven by the bank’s efforts to cut costs. Goldman’s also decided to “constrain headcount growth” until the end of the year. One simple way for a company — particularly one in the financial sector — to cut costs is AI adoption at scale, tasking new tech tools to tackle mundane duties that lower level workers may have performed beforehand.

Meanwhile, sales software giant Salesforce has put a number on AI cost savings to date: $100 million, yearly. Bloomberg notes the company has been “vocal” about its own adoption of AI technology, even as it sells agent-powered AI tools to its many customers through its new Agentforce platform. The AI moves have been driven by Salesforce CEO Marc Benioff, who said recently that he’d “never been more excited about anything in my entire career.” Speaking at the company’s Dreamforce conference this week, Benioff said that AI tech has allowed the company to reach out to customers who’d previously have fallen through the net, with human workers not having the capacity to call them back. 

This means as well as saving the company millions (thanks to aggressively slashing its customer support worker numbers) AI is helping bring in more revenue. This combo is exactly the kind of benefit AI evangelists promise the technology can deliver if it’s applied carefully.

What’s the lesson here for your company?

You may see these different headlines as a solid thumbs-up for the potential benefits of deploying AI technology across your own enterprise, in search of some of those promised savings and worker productivity boosts. Salesforce’s example is particularly eye-catching. But remember: this company is a sales-focused software outfit that is deploying carefully developed AI tools it’s in control of throughout its own sales-centric operation. This is a reminder that you need to very carefully choose which third-party AI tools you’re using, and make certain you’re deploying them in the right way in the right places in your operation.

The other takeaway is that you’ll likely see some dramatic shifts in the talent pool when you’re looking to hire new staff members, both because there may be more people looking for entry level work than before, and also over the longer term as AI begins to reshape the job market.