Why replacing junior staff with AI will backfire
Entry-level job openings in the US have decreased by nearly 35% since January 2023, according to data from workforce research firm Revelio Labs.
Cemile Bingöl | Digitalvision vectors | Getty Images
As more and more companies brazenly announce AI-driven layoffs in 2025, it looks like the first jobs will be junior positions and entry-level jobs.
Graduate programs and internships are at risk of becoming a thing of the past as large companies reduce staff numbers in an effort to introduce artificial intelligence. Amazon recently laid off 14,000 corporate employees as it aims to invest in “biggest investments” that include productive artificial intelligence.
Other companies leaning on AI and cutting jobs include Accenture, Salesforce, Lufthansa and Duolingo.
Concerns are now growing about whether AI can do the job of entry-level workers and graduates, increasing the barrier to entry.
In fact, 62% of UK employers expect assistant, clerical, administrative and managerial roles to be available will most likely be lost to artificial intelligenceAccording to a new survey of 2,019 senior HR professionals and decision makers by the Chartered Institute of Personnel and Development (CIPD).
Further data shows that the number of graduate positions available fell last year. Entry-level job openings in the US have decreased by nearly 35% since January 2023, according to data from workforce research firm Revelio Labs.
In its annual Student Recruitment Survey, the Institute of Student Employers in the UK found that there are just under 17,000 graduate vacancies in the UK. 1.2 million applications It highlights the intense competition and limited positions available to young people.
While companies are reducing the hiring of young workers, Fabian Stephany, an assistant professor of artificial intelligence and working at the Oxford Internet Institute, pointed out that hiring entry-level employees is actually an “investment” for the future.
Although they are prone to errors and require hands-on training, experts told CNBC why replacing younger workers with AI will backfire on companies in the long run.
‘Leadership of the future’
According to Chris Eldridge, North America CEO of UKI and technology recruiting firm Robert Walters, healthy organizations develop their own talent and hiring externally for not all positions is possible.
“If you eliminate too many ancillary roles, you can starve the flow of internal talent,” Eldridge said.
“Entry-level and lower-level roles are the breeding ground for future leadership. I think if you get past that bottom tier, you’re going to have a talent bottleneck at some point in the business, and that always leads to increased hiring costs.”
If a company doesn’t have enough young talent, it will have to hire externally in the future, creating a “talent doomsday cycle” that will lead to increased costs, wage inflation and dependence on the external talent market.
“I represent a talent consultancy, but we would advise every organization to have a variety of avenues for talent in the marketplace, and one of them is to create your own talent,” Eldridge said.
“It’s also crucial to retain talent through the training development and opportunities you can give people… but if you close the pipeline for bringing young or entry-level talent into an organization, you’re missing out on an important aspect of growth,” he added.
‘Generation bridge’
According to Stephany of the Oxford Internet Institute, companies that do not nurture young talent will eventually lose touch with consumers and mainstream culture.
“A company is part of society, and if it doesn’t adequately reflect society, it’s very hard for me to imagine a business model or product that doesn’t need that intergenerational bridge… and young people bring new ideas that bring a new perspective,” Stephany told CNBC Make It.
Companies that don’t adapt and hire younger workers will be “like a retirement home company,” Stephany said. “It’s like a company of people who are going to retire soon because…they might not have the edge and the swagger that you need to bring a new product to market.”
Eldridge agrees, saying there’s a stereotype that all good ideas come from the top, but “a very healthy percentage of great ideas in a company come from people in their first two or three years in an organization because they’re looking at it with fresh eyes.”
An added benefit of having young people in an organization is the opportunity for reverse mentoring, especially given that young people bring with them crucial knowledge of technology and losing this would be a “real threat” to organizations.
“If anything erodes the opportunity for mentoring in both directions and the transfer of knowledge in both directions, that will reduce institutional knowledge or create institutional gaps,” he said.
Matthew Prince, co-founder and CEO Cloudflare told CNBC’s “Worldwide Exchange” last week that the tech firm plans to hire 11,000 interns in the age of artificial intelligence to improve the skills of the next generation and also bring new ideas.
“50-year-old CEOs like me will not be the ones teaching companies how to leverage artificial intelligence. We need to learn from the next generation,” Prince said.
‘Culture carriers’
According to Stephany, “tacit knowledge” is an important element of keeping an organization healthy. It refers to the tacit and unspoken knowledge that colleagues share about a company’s culture.
“There are so many things that make a company run that can’t be written down anywhere,” he said. “They emerge from a network of people who sometimes sit in the cafeteria and say, ‘I’ve been with the company for 25 years, I can explain to you what’s going on, that X has a problem with Y.’
“This is the type of corporate wisdom of tacit knowledge that is the lubricant for the economic well-being of the company,” he said.
Robert Walters’ Eldridge added that young people are sponges and “absorb the best of a trade,” including such tacit knowledge that can only be passed on from humans.
“They’re also the culture bearers of the future, so if you’re not bringing in that group, what does that mean for the future in terms of culture?”
“I think companies rely on that upward pressure when you hire a group of inexperienced people, when they’re hungry, when they want to learn. Sometimes they’re asking a lot from the organizations that test them and keep a company in good shape. If you don’t have that, it can potentially be detrimental to the culture and performance of an organization,” Eldridge said. he added.
