The job market is rapidly reducing the hiring of new employees. As repetitive and simple entry-level tasks are being replaced by artificial intelligence (AI), corporations are restructuring their hiring strategies to focus more on experienced workers. In particular, with reductions at big tech companies, the openings for new employees are becoming increasingly limited.
According to a report released by U.S. venture capital SignalFire on the 27th (local time), the hiring of college graduates by 15 major U.S. big tech companies decreased by 25% compared to the previous year. During the same period, new hiring at startups also fell by 11%. In contrast, hiring for talented individuals with 2 to 5 years of experience increased by 27% and 14%, respectively.
Asher Bantok, head of research at SignalFire, noted, "Entry-level positions are low-risk and repetitive, making them the first to be affected by AI automation," and explained, "While AI is not the sole reason for the hiring reductions, it is the most persuasive variable."
Global logistics corporation UPS implemented its largest workforce reduction in its 116-year history at the end of last month, cutting 20,000 jobs. The company stated that the background of this reduction is the automation using AI and machine learning technologies. Fintech company Klarna has partnered with OpenAI and introduced an AI assistant, replacing about 700 jobs. Global language learning service corporation Duolingo is transitioning to AI-based content creation by reducing 10% of its contracted workforce in the first half of this year. Financial management software corporation Intuit laid off about 1,800 people last year and is focusing on an AI-centered strategy, while Cisco also reduced 5,900 employees, accounting for 7% of its total workforce, and is restructuring its organization around AI and cybersecurity.
The advancement of AI technology is accelerating this shift in hiring structure. AI company Anthropic, considered a rival to OpenAI, unveiled its new model "Opus 4" on the 22nd (local time) at a developer event called "Code with Claude" in San Francisco. Opus 4 can perform complex tasks such as coding, planning, and data analysis for 7 hours straight without human instructions. Dario Amodei, CEO of Anthropic, stated, "In the next six months, 90% of the entire code will be written by AI."
Major big tech companies leading the AI market have also started downsizing. Microsoft (MS) laid off 6,800 employees earlier this month, of which 40% were software engineers. Satya Nadella, CEO, revealed, "AI is writing 30% of the entire code," and Mark Zuckerberg, CEO of Meta, predicted, "By 2026, half of the development work will be done by AI."
According to the U.S. Bureau of Labor Statistics (BLS), the employment of computer developers has decreased by 27.5% over the past two years, and related job postings have also decreased by 35%. Entry-level developers are now required to possess planning and design skills beyond simple coding. Heather Doshey, HR partner at SignalFire, stated, "AI will not directly take your job, but the person who handles AI the best will take that job."
The World Economic Forum (WEF) stated in its report "The Future of Jobs 2025," released in April this year, that "40% of all employers are planning workforce reductions in roles that can be automated by AI." It particularly analyzed that areas such as market research, technical support, and content planning will be hit the hardest. In the U.S., 49% of Generation Z respondents said, "The value of a college degree is not what it used to be because of AI."
A similar trend is appearing in Korea as well. Major domestic corporations are clearly reducing regular public recruitment of new employees and transitioning to hiring on demand, especially in key IT industry hubs like Pangyo, where movements focused on experienced workers are becoming common.
Of course, AI does not replace all roles. McKinsey analyzed that "planning, branding, and decision-making based on reasoning are the fields that AI will replace last." Google has introduced generative AI while simultaneously establishing new roles such as "AI prompt planner" and "AI risk manager."
Demis Hassabis, CEO of Google DeepMind, recently stated on The New York Times (NYT) tech podcast "Hard Fork" that "In the next 5 to 10 years, AI will change countless jobs," and added, "If the internet created millennials, and smartphones gave rise to Generation Z, then generative AI will be the symbol of Generation Alpha."