TLDR: A recent government study in Australia reveals a significant shift in recruitment, with firms increasingly favoring senior, experienced workers over entry-level engineers due to the rise of generative artificial intelligence. This trend is mirrored globally, as AI automates routine tasks, leading to a reduction in junior positions and a demand for higher-order skills from new graduates.
Australian employers are recalibrating their hiring strategies in response to the growing influence of generative artificial intelligence, a government study has found. The research indicates a notable shift towards recruiting more senior and experienced professionals, leading to a reduction in entry-level positions within Australian firms. This trend suggests a changing landscape for aspiring engineers and other junior staff.
This phenomenon is not isolated to Australia. A US study, which analyzed job advertisements from 285,000 firms over the past decade, revealed that junior-level jobs experienced a sharp decline in companies adopting AI from the first quarter of 2023 onwards. This reduction was primarily driven by a decrease in hiring rather than layoffs. The study highlighted that graduates from mid-tier institutions were disproportionately affected, while those from very high or very low-status colleges faced less impact. The authors of this study noted, ‘The largest reduction occurred in wholesale and retail trade, where adopting firms hired roughly 40% fewer juniors per quarter than non-adopters. This pattern may reflect the greater substitutability of junior tasks in these sectors with generative AI tools, which can automate routine communication, customer service, and documentation.’
Further reinforcing this shift, a survey by Spark Admissions in April 2025, involving 84 C-suite executives, found that 52% of companies are seeing entry-level positions eliminated due to AI. Interestingly, while technical competence remains crucial, the most significant skills gap identified in recent college graduates was not technical knowledge, but rather communication abilities (cited by 51%) and problem-solving/critical thinking (50%). The survey also indicated that 55% of executives reported stable or increased hiring of recent college graduates compared to the previous year, suggesting a redesign of entry-level roles to demand higher-order skills from the outset, moving away from traditional training grounds.
Another report, the State of Talent Report – 2025 by SignalFire, a data-driven VC firm, observed that big tech companies reduced the hiring of college graduates by a substantial 25% in 2024 compared to 2023, with startups seeing an 11% decrease. Conversely, the hiring of seasoned professionals increased, with big tech companies boosting recruitment for employees with two to five years of experience by 27%, and startups by 14%. These findings align with a World Economic Forum survey, where 40% of employers expressed intentions to downsize staff to accommodate AI automation.
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The impact of AI is also creating anxiety among younger workers. A Cox Business report from August 2025, which surveyed over 1,000 Gen Z and Millennial employees in the United States, revealed that approximately 50% are hesitant to disclose their AI usage at work. This apprehension stems from fears that AI could replace their jobs, a concern shared by 47% of respondents. Despite these fears, over 60% of young workers view AI’s growing role positively, utilizing it for tasks such as summarizing documents, brainstorming, data analysis, and coding. However, 40% of Gen Zs and 38% of Millennials believe AI will replace certain roles while simultaneously creating new opportunities in the coming two to three years.
