Artificial intelligence adoption by businesses and companies across different industries will lead to a significant increase in unemployment among college-graduates, claims ServiceNow CEO Bill McDermott.
Bill McDermott on the Squawk on the Street show on CNBC said that AI adoption can lead to entry level workers finding it very difficult to find jobs. Meanwhile stressing on how unemployment “could easily go into the mid-30’s in the next couple of years”.
What did McDermott say on entry level jobs?
“So much of the work is going to be done by agents. So it’s going to be challenging for young people to differentiate themselves in the corporate environment,” McDermott told CNBC.
Unemployment and Underemployment rates surging in the US
According to figures of the Federal Reserve Bank of New York, the unemployment rate for recent college graduates at the end of 2025 was at about 5.7 percent. Whereas the underemployment rate of 42.5 percent was the highest level since 2020.
These figures are a clear indication of how companies have started to automate entry level positions, thereby cutting costs resulting in unemployment among entry level workers.
Layoffs an Industry wide trend
Just in 2 months of 2026 we have already seen layoffs announcements from companies like Block who has already announced plans to cut nearly half of its workforce as AI automates more work. Meanwhile, software firm, Atlassian, has seen its stock dive 54 percent this year stemming out of AI disruption fears. Therefore, it announced it would lay off about 10% of its workforce to support AI investments.
Several other companies have also joined this layoff trend like Palantir whose CEO Alex Karp told CNBC that he wants to grow revenue by 10 times while reducing headcount. Amazon CEO Andy Jassy also said in June that the company will also shrink its corporate workforce with AI tools.
How will Service Now help its clients?
Speaking on how ServiceNow’s tools will help businesses he said ServiceNow’s tools will help businesses slash hiring costs, adding that the software firm has already taken out 90% of the use cases that previously relied on humans in customer service. It also allows businesses to maintain headcount while growing free cash flows and revenue.