AI Is Altering the Job Market for New Grads. Who’s Still Hiring?

Over the past few weeks, hundreds of thousands of students have earned diplomas from colleges and universities across the country. But for many in the class of 2025, the real challenge is just beginning: finding a job in their field of study.

The rise of artificial intelligence is reshaping the employment landscape—especially in the tech sector—and many newly minted graduates are facing fewer clear paths to long-term careers than in previous years, according to Oxford Economics, a global economic forecasting firm.

That’s not to say there are no opportunities. The U.S. Bureau of Labor Statistics reported 7.2 million job openings in March, roughly in line with pre-pandemic levels. However, behind those numbers are warning signs that AI is contributing to subtle but significant shifts in the job market.

Fewer Job Openings in Key Sectors

While unemployment has ticked up only slightly over the past year, continued jobless claims have reached their highest point since 2021. This signals that those who lose jobs are having a harder time finding new ones—especially those entering AI-disrupted fields.

“Continued claims continue to creep higher, confirming that workers who lose their jobs are finding it tougher to find new employment,” wrote Nancy Vanden Houten, lead U.S. economist at Oxford Economics, in a May 29 note.

For new graduates, that’s especially relevant. As companies rapidly integrate AI tools into their workflows, many are rethinking hiring strategies, delaying recruitment, or downsizing entry-level roles that were once gateways to stable careers.

“New graduates are entering the job market at a time when the future is murky and many pathways for career entry are less reliable,” wrote Allison Shrivastava, an economist at the Indeed Hiring Lab, in an April report. “Job openings are increasingly concentrated in fields that may not align with every grad’s aspirations.”

Indeed reports that a significant share of in-demand roles now require little to no college experience, meaning many graduates are competing with candidates who didn’t follow traditional academic routes.

AI’s Impact on Tech and Beyond

Over the past 20 years, college enrollment ballooned in computer science and other tech-related fields. But since 2022, the very industries that saw surging demand for talent—like computer systems design and data science—have begun pulling back. AI tools are replacing some tasks entirely, making certain entry-level roles less essential.

As a result, unemployment among recent graduates—defined as adults aged 22 to 27 with a bachelor’s degree—is now higher than the national average, reversing a long-standing trend. For the first time in decades, having a degree does not automatically translate to better job security, especially in industries directly impacted by AI adoption.

Healthcare Still Thrives Amid Automation

There are bright spots. While AI is disrupting many office-based roles, demand for healthcare professionals remains strong. In fact, medical careers dominate the list of job postings with the highest growth on platforms like Indeed, in part because human-centered care remains difficult to automate.

Jobs in nursing, therapy, and diagnostics continue to see steady hiring, and healthcare programs have expanded in response to sustained demand.

Graduates Still Actively Searching

Despite early roadblocks, most recent graduates remain engaged in the job hunt. Unlike older workers who may exit the workforce after setbacks—thus lowering the unemployment rate—graduates continue applying, which keeps the youth unemployment rate elevated but also reflects a more accurate snapshot of the market’s difficulty.

Shrivastava recommends pursuing internships and short-term placements if full-time roles remain elusive. These positions can offer valuable industry exposure, networking opportunities, and potential conversion to permanent roles. In many fields—especially those adjacent to STEM, business, and public service—internships are still actively hiring.

Degrees Still Pay Off—Eventually

Though the near-term outlook may feel daunting, historical data remains clear: college graduates tend to earn more and weather economic volatility better than those without degrees. On average, bachelor’s degree holders earn $1 million more over a lifetime than those with only a high school diploma, and $500,000 more than those with an associate degree.

Oxford Economics also notes that during downturns and periods of technological change, workers with higher education levels are more likely to adapt and shift into new roles—especially if they continue learning and upskilling alongside technological advances like AI.

In a rapidly changing job market, resilience and adaptability may be just as important as a diploma.