AI threatens entry-level tech jobs, Goldman Sachs warns Gen Z workers

Young professionals in the technology sector are facing a sharper rise in unemployment than their older peers, with artificial intelligence (AI) driving much of the disruption, according to new warnings from Goldman Sachs.

Joseph Briggs, senior global economist at Goldman Sachs Research, told the firm’s “Goldman Sachs Exchanges” podcast that joblessness among tech workers aged 20 to 30 has climbed nearly three percentage points since early 2024—more than four times the increase in the broader US unemployment rate.

Briggs said the numbers suggest that entry-level roles, which have traditionally been the starting point for graduates entering the industry, are now among the first to be displaced as companies integrate AI into operations. “If you look at the tech sector’s employment trends, they’ve been basically growing as a share of overall employment in a remarkably linear manner for the last 20 years,” Briggs said in the episode, set to air on Tuesday. “Over the last three years, we’ve actually seen a pullback in tech hiring that has led it to undershoot its trend.”

Pullback after decades of growth

Goldman Sachs research indicates that this is the steepest reversal in technology hiring in over two decades, ending a period of consistent growth that continued even through economic downturns. The shift began to emerge in late 2022 and accelerated after the public release of OpenAI’s ChatGPT, which sparked a wave of AI adoption across industries.

While AI implementation is still in its early stages—Goldman Sachs’ recent report Quantifying the Risks of AI-Related Job Displacement, co-authored by Briggs, found that only 9% of businesses had used AI in production processes within the previous two weeks—the employment impact is already being felt. The report warns that AI’s ability to automate certain white-collar functions could lead to sustained job displacement in sectors once considered shielded from technological disruption.

The caution from Goldman Sachs echoes similar concerns voiced by technology leaders. Speaking to CNN’s Fareed Zakaria, Microsoft co-founder Bill Gates said AI is advancing “at an exceptional pace” and could begin replacing skilled professionals “without warning,” leaving little time for workers to adapt or retrain. Gates added that the speed of change is likely to challenge traditional workforce transition models.

Entry-level roles most exposed

The Goldman Sachs analysis highlights that entry-level positions are particularly exposed because they often involve repetitive or procedural work that AI systems can replicate. For younger workers, this creates a double challenge: entering a competitive job market just as one of its most accessible entry points is shrinking.

Despite AI’s relatively limited penetration in day-to-day production—meaning many firms have yet to scale AI across all operations—the labour market data suggests companies are restructuring in anticipation of deeper automation. For Gen Z professionals hoping to build a foothold in tech, the trends point to the need for broader skill sets and adaptability.

Goldman Sachs’ report stops short of forecasting mass unemployment in the immediate future but warns that, without targeted workforce policies and retraining initiatives, the economic effects of AI could disproportionately burden younger and less-experienced workers.