AI Steals Entry-Level Tech Jobs: Graduate Hiring Plummets 46% as Bots Take Over

The AI Disruption in Tech Hiring

The UK tech sector is experiencing a dramatic 46% drop in graduate job opportunities over the past year, with projections indicating another staggering 53% decline ahead, according to data from the Institute of Student Employers (ISE). This alarming trend represents the most significant contraction in entry-level tech positions since the pandemic-era downturn.

Why AI is Replacing Junior Roles

The primary driver behind this collapse in graduate hiring is artificial intelligence's ability to perform routine entry-level tasks that traditionally served as training grounds for new graduates. AI systems are now handling basic coding assignments, data analysis, and fundamental digital operations that previously provided crucial experience for young professionals entering the workforce.

While companies continue to need technical talent, they're increasingly bypassing graduate training programs in favor of hiring experienced professionals who can work alongside AI systems rather than compete with them for basic tasks.

The Broader Graduate Employment Landscape

ISE's comprehensive analysis reveals that graduate hiring across all sectors has fallen by 8% year-over-year, marking the first decline since the 12% drop during the 2020 pandemic. However, the technology and pharmaceutical industries are suffering the most severe impacts, with tech bearing the brunt of AI-driven displacement.

Stephen Isherwood, ISE joint chief executive, confirmed that AI is actively displacing young professionals just as many industry observers had predicted. "It is a tough market for students and young people in general," he told the Financial Times. "There is not much churn in the labor market and young people are suffering."

The Recruitment Paradox

Despite the hiring downturn for graduates, tech roles remain the most sought-after positions in the graduate recruitment landscape. IT, digital, and AI positions were identified as the most in-demand skills, with 46% of organizations across all economic sectors actively seeking these capabilities.

Ironically, AI adoption in the recruitment process itself remains surprisingly limited. While over half of employers use automated systems for some testing aspects, only 15% employ AI in gamified assessments. This low adoption rate creates a curious disconnect between how companies use AI for operations versus how they use it for hiring.

The Cheating Conundrum

Employers are increasingly concerned about AI-assisted cheating during recruitment processes, with 79% of organizations reporting they're redesigning or reviewing their hiring procedures specifically to address AI developments. However, only 15% of employers stated they never suspected or identified candidates using AI to cheat in assessments.

Industry-Wide Trend Confirmation

The ISE findings align with broader industry movements, where major tech companies like Salesforce, Workday, and Microsoft have announced significant workforce reductions while simultaneously increasing their AI investments. Microsoft's plan to eliminate 10,000 positions while deploying new technologies exemplifies this shift toward automation over human labor.

The Vicious Cycle for Future Talent

This trend creates a dangerous feedback loop: graduates cannot secure the entry-level positions needed to gain experience, which inevitably leads to fewer qualified mid-level professionals emerging in the coming years. Companies pursuing short-term efficiency gains through AI implementation may be compromising their long-term talent pipelines, leaving recent graduates caught between technological advancement and career opportunity.