Are we facing an AI-fueled talent pipeline time bomb?

The notion of AI replacing human labor is decades old, with academic Herbert A Simon first musing in 1965 on the idea that AI could one day perform "any work a man can do". Since then, this concern has permeated throughout society – and one that’s become more realistic than abstract in the last 10 years.

In 2017, as Google first outlined its transformer architecture, PwC estimated that 30% of jobs could be automated by the middle of the next decade. While that hasn't panned out, AI is progressing at such a pace that we could, for the first time in human history, be on the cusp of seeing this play out in a meaningful way.

Many fear that a permanent reduction in entry-level roles is underway, with IDC research showing that 66% of enterprises expect entry-level hiring to slow. That's in addition to 91% reporting that roles are already changing or vanishing due to AI. The chief reason is clear: short-term cost savings. But at what long-term cost?

Experts tell ITPro they fear a number of unintended consequences, chiefly that today's pullback in entry-level workers risks hollowing out the core of the most dynamic businesses, threatening their long-term survival.

A bleak picture for tech juniors

By any metric, the rise of generative AI has coincided with a significant reduction in entry-level roles and job vacancies more generally. Anecdotally, a long line of companies have announced they're slowing down hiring or taking an AI-first approach to plugging shortfalls, including HP, IBM, Amazon, Salesforce, and Klarna – with the caveat that Salesforce has since rowed back slightly, as has Klarna.

A wealth of research points to a general trend. The UK's Institute of Student Employers (ISE) reported that graduate hiring fell 8% year-on-year between 2024 and 2025 – the first time this has happened since COVID-19.

King's College London (KCL) also found that companies in which workplaces are exposed to AI reduced employment by 4.5% on average, with the effects concentrated on junior positions – which fell by 5.8%. Highly exposed firms became 16.3% less likely to post new vacancies, while technical roles like software engineers and data analysts saw the steepest declines in listings. This represents a fundamental reshaping of the workforce composition.

We can compound this with British Standards Institute (BSI) research that revealed that 41% of business leaders globally said that AI allows for headcount reductions. Nearly a third (31%) also said their organization explores AI solutions before considering hiring a human.

One of the starkest signifiers, however, is a viral infographic that showed the number of US job openings decoupled from the value of the S&P500 when ChatGPT launched in 2022. When you consider that the number of people of working age overall has also increased during this period, it paints a stark picture. But are these trends correlation or causation?

Is AI driving a great workforce recomposition?

Author of the KCL research Bouke Klein Teeselink is a lecturer in philosophy, politics and economics at the university. He tells ITPro that while it's hard to say for certain based on the available evidence, he believes part of the reduction is definitely causal. "Entry-level jobs are more easily automatable than senior jobs, as senior jobs rely much more on tacit knowledge of the firm and production processes (which are not codified, and therefore not part of the training set of AI), and are more relationship-focused," he says.

Others also gravitate toward causation including AI consultant Chris O'Halloran, who tells ITPro: "I'm seeing it at multiple levels. Startups are launching as solo founders powered by AI, and they're growing faster than before. Typical high-growth start-ups would grow 2% week on week. Now they average 10%, with fewer people.

"A core focus of the companies I work with is building AI agents that augment their workforce. Often, these roles won't be replaced through natural attrition, where AI can do the work. The uncomfortable truth is that entry-level work is often basic repetition: doing research, data entry, copying across systems. All things AI does really well. It comes down to economics."

One expert took exception to this thesis, however, offering a different perspective. Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, said that hiring in general has slowed and that entry-level jobs are now extremely valuable, given that younger workers are more likely to be fluent with AI than older workers who didn't grow up using it.

"We have ex-school teachers, young business graduates, and young HR staff in our company who are outperforming many senior people just because of their ambition, open-mindedness, and willingness to learn.

"Companies and teams value young, fresh-thinking employees because they bring new ideas, understand the needs of younger customers, and are eager to learn and contribute. We speak with HR leaders all over the world, and even as overall hiring slows, they’re still hiring – and always will hire – entry-level workers."

Why are businesses turning to AI in force?

To understand what is happening, we must also understand why. The chief driver will be cost savings, naturally, with businesses keen to pursue this after a bitter few years hit by crisis after crisis and an unsettled economic picture. But businesses stand to gain other benefits from aggressively turning to AI in this way.

"Aside from cost, companies can gain consistency, speed, and 24/7 output from AI-driven systems," says Ebenezer Allen, CEO at Westlink Academy, a USDOL-Registered Apprenticeship Program and training provider focused on preparing adult learners and early-career professionals for in-demand roles in cybersecurity, cloud, and IT. "There’s also the ability to scale operations quickly without traditional hiring bottlenecks. For highly regulated sectors, AI also provides an opportunity for built-in compliance or auditability – if implemented well."

Another benefit, O'Halloran says, is the capacity to unlock entirely new revenue streams. "An AI agent works 160 hours a week, not 40. This unlocks work and tasks that were previously non-economical. They now become profitable," he explains.

"One client had a regional product they couldn't sell. It wasn't economical to reach with human sales reps. But the AI sales agent we built, modelled on their top performers, was able to take that 30% of traditionally unsold inventory and work it 24/7. It's now being sold autonomously with AI. That's not a cost saving, that's new revenue."

Teeselink adds that there are tasks at which AI is simply better than humans, and that will render massive productivity gains. In his own work, AI assists him in writing, finding literature, coding, ideating, and many other tasks. None of these are fully automated, he adds, but he performs all of them much faster and potentially better with AI than without.

What are the implications for the future workforce?

With any new profound technological shift, there is the risk that short-term benefits come at the cost of long-term stability and longevity – especially when you reduce today's junior workforce. This is the warning that Liz Eversoll, CEO of Career Highways, an upskilling and recruitment company, is keen to sound.

"The real risk isn’t that AI eliminates human contribution – it’s that companies unintentionally erode their future talent pipeline by removing the very roles where emerging employees typically learn, stretch, and build foundational skills.

"At Career Highways, we see every day that the organizations thriving through this shift are those using AI to augment skill development – not replace it," she says. "They’re moving toward dynamic job architecture and skill intelligence so they can understand which skills are impacted by automation, where human capability is still essential, and how to guide people into higher-value roles with clarity and confidence."

'Erosion' is a notion that frequently comes up in ITPro’s conversations with the experts – especially in the sense of long-term loyalty and the notion of company values being cultivated over many years. Allen, for example, describes entry-level employees as "energetic connectors" across departments – asking naïve questions that lead to innovation and challenging assumptions. Lose them, he says, and you lose part of your feedback loop: "You can’t automate ambition. And if people can’t enter the system, they won’t stick around long enough to lead it."

Kyle Elliot, founder of Tech Career Coach and executive coach at CaffeinatedKyle, said that talent pipelines are certainly at risk of vanishing. "Entry-level positions are about more than completing tasks. They’re crucial for developing future talent," he says. "Early-career employees learn key skills and gain experience that shapes their long-term careers. Without these roles, they miss opportunities to build foundational expertise."

Can we avoid the talent pipeline time bomb?

AI usage will ratchet higher and higher, if the research is to be taken at face value, with AI in today's startups and enterprises increasingly consuming workloads that humans once considered critical to their roles. But the talent pipeline 'time bomb' – in which companies begin to lose their identity due to the increasingly limited stock from which to draw the seniors of tomorrow – need not be set off if AI is approached in a smarter way.

O'Halloran is unsure ultimately where many seniors of tomorrow will come from, but offers two possibilities: the first is that organizations invest in internal AI-accelerated development in which training programs compress years of training into months. The second is that young people may be forced into starting businesses and learning by doing before returning to the corporate world with experience in later life.

"I think credentials will matter less," he says. "It'll be more about demonstrated competence with key skills: strategic thinking, curiosity, creativity, and culture. Higher education needs to evolve. Universities need to bring practical AI into their curriculum."

Teeselink does not feel that this problem will resolve itself, due to a phenomenon that economists call 'poaching externality' – where some companies train and upskill juniors only for another, much larger organization to come along and poach them. There must, therefore, be public policy shifts that incentivize companies towards hiring juniors and helping them develop productive skills in the future.

"Imagine that a firm recognizes that it needs experts in the future. Why does it not simply hire juniors now to train them, even if the traditional junior-level tasks are automated?" he asks. "The reason is that the person cannot commit to staying at the firm once they have received their training. In other words, another company that did not help their juniors develop expertise can simply outbid the company that did the training, and hire this person once they become an expert."

Meanwhile, with AI uptake accelerating, Eversoll says this need not be a cause for panic – rather an opportunity. "If companies let AI shrink early-career hiring without redesigning transparent, skill-based routes into the organization, they will feel the talent shortage most acutely five to seven years from now in leadership, technical depth, and culture-carrying roles," she says, "But there’s an upside – AI also gives us the intelligence to rebuild the pipeline in a healthier way. With the right skills data, employers can map new on-ramps, democratize mobility, and create advancement options for individuals whose roles are changing.

"This is a moment that calls for redesign, not retreat. When organizations invest in skills visibility and internal mobility, AI becomes an engine for growing talent — not a barrier to entry."