AI hits college grad jobs hard, ServiceNow CEO says

Artificial intelligence could soon reshape the job market for young professionals. ServiceNow CEO Bill McDermott said rising AI automation may push unemployment among recent college graduates into the mid-30% range in the coming years.

Speaking on CNBC’s Squawk on the Street, McDermott warned that many entry-level roles are being replaced by AI agents, making it harder for new graduates to stand out in the corporate environment.

“I do think it’s coming quicker than people anticipate,” he said.

The warning comes as companies rapidly expand their artificial intelligence tool usage, which they use to boost productivity and reduce labour costs. McDermott explained that AI systems now handle many basic business operations which used to require human employees.

He said that agents will complete most work tasks because young workers will find it difficult to make themselves stand out in work environments which use AI technology to perform essential functions.

The Federal Reserve Bank of New York reported that recent graduates faced an unemployment rate of 5.7% at the end of 2025. However, the underemployment rate stood at 42.5%, the highest since 2020.

The executives from technology companies share the same security concerns which they need to address. Amazon CEO Andy Jassy has previously said the company expects its corporate workforce to shrink as AI tools become more capable.

Palantir CEO Alex Karp has proposed that businesses should increase their revenue through operational efficiency improvements which require fewer employees.

Companies are currently changing their operational methods to implement artificial intelligence technologies within their work environments. Block, a payments company, has announced plans to cut their workforce because automation will take over multiple responsibilities.

Atlassian, a software company, announced that it would reduce its workforce by 10% to allocate resources for artificial intelligence research and development.

ServiceNow uses its AI-powered software to help businesses reduce their recruitment expenses while they achieve higher operational productivity according to McDermott. The executive claims that the company has developed technology which can accomplish 90% of customer service duties that required human staff to perform.