The rapid advancement of AI is impacting the global workforce, presenting both opportunities and challenges to society. The greatest advantage of AI is its ability to reduce costs for companies and individuals. PwC estimates that AI-driven cost savings can total more than $6.6 trillion globally by 2030 and that AI processes can reduce operational costs by up to 30%.
For workers, however, AI has sparked worldwide concerns about the labour market. Traditional entry-level positions are being replaced by AI’s capacity to automate repetitive work, particularly in sectors like technology, finance, accounting, and law, with major firms already cutting thousands of jobs. Research indicates that out of 3, at least 1 Australian worker is at risk of losing their position due to AI-driven automation. For early-career workers and university graduates, AI raises uncertainty about the future of traditional entry-level roles, the adequacy of existing skill preparation, and the need for both employers and universities to produce an AI-driven labour market.
AI adoption is already reshaping today’s world. Globally, major firms are leveraging AI to streamline operations and cut costs, but these advancements come with significant consequences to employees. PwC has recently had 2 waves of layoffs, targeting audit and tax divisions, cutting 1,800 jobs in September 2024, and a further 1,500 roles in May 2025, citing AI integration and automation. Similarly, Amazon has reduced its workforce by nearly 30,000 employees, while JPMorgan Chase anticipates shedding up to 10% of its staff to replace them with AI systems. Ford CEO Jim Farley predicts that AI could replace half of all white-collar jobs.
AI is changing the nature of work in these industries itself. Tasks that were once routine and repetitive and completed by entry-level workers and university graduates are being increasingly automated. Yet, these efficiency gains are largely realised by employers rather than employees. The Australian Financial Review suggests AI raises concerns about whether job displacement and the widening skills gap are ethical and sustainable for the economy.
As companies continue to integrate AI into today’s workforce, traditional roles are being redefined or eliminated, fundamentally changing the structure of professions. This leaves questions for job design and workforce transition.
Figure 1: Employee headcount over time for the software technology industry.
AI’s transformation of today’s workforce threatens the job security of current employees and signals potential effects on current university students and recent graduates entering the labour market. While shifts in the graduate labour market have historically been influenced by a variety of factors, including broader economic conditions and the typical fluctuations in business demand, part of the current change is also being driven by the ongoing and accelerating AI transformation.
Clinton Marks, a director at Robert Half, remarks on the “rite of passage” for graduates who handle tedious tasks like “reconciling a spreadsheet” or “writing up reports”. Generative AI now performs these tasks in a fraction of the time. LinkedIn’s chief economic officer, Aneesh Raman, has suggested that AI has the potential to significantly “slash” the number of entry-level jobs within the next five years. Yet, despite these predictions, it may be reasonably argued that the ramifications of AI for white-collar workers are likely to be less severe and more gradual than commonly suggested.
Despite AI eliminating entry-level graduate jobs, it also has the potential to create new opportunities and a need for new skillsets, specifically in the cybersecurity or engineering space. With machines increasingly handling all the menial and repetitive tasks we never particularly enjoyed, graduates can focus their efforts on intellectually engaging and strategically valuable work, positioning them to thrive in an evolving professional landscape.
The wave of AI-driven automation is rapidly reshaping labour markets and forcing education systems to pivot to future-forward thinking, particularly in sectors such as consulting, law, finance and technology. Australian graduates are already seeing entry-level white-collar roles disappear as tasks that once required “three or four juniors and a senior” can now be handled by “AI and one junior”, inevitably reducing junior hiring. This rise of AI in entry-level roles emphasises the urgent need for universities to better prepare their students for a rapidly changing work environment with fewer traditional entry-level pathways. Such adaptation is twofold: on one hand, universities must embed AI literacy skills in their students so they are confident in using these technologies, and on the other, they must prioritise the cultivation of creativity, deep thinking and problem-solving skills, which AI cannot yet replicate.
As AI strips away menial and routine tasks, which serve as the training grounds for graduates, many graduates are now being pushed directly into roles demanding managerial-style thinking. Despite the lack of professional experience developed from an entry-level position, graduates are expected to show leadership, judgement and decision-making early in their careers. Thus, university graduates require higher-order skills such as communication, management and leadership, plus technical ability.
A 2024 McKinsey study found that while demand for advanced technology skills and intellectual human abilities is soaring, executives report these are precisely the skills most lacking in today’s workforce. This “skills gap” highlights the growing mismatch between university education and employer expectations in an AI-driven economy. In many sectors, even those facing talent shortages, junior employees are quickly overwhelmed or let go for lacking skills they never had a chance to develop.
Addressing this gap cannot fall on universities alone; employers must play a part in providing structured training and mentorship. WEF, OECD and McKinsey warn that a massive upskilling and a rethinking of early career development are urgently needed to prevent AI-driven automation from outpacing the ability of workers to adapt. Simultaneously, shifts like hybrid work have eroded traditional mentoring models, making it harder for new employees to “learn by osmosis” from seasoned colleagues.
Without coordinated action from both universities and employers, recent graduates risk being the generation most exposed to the disruptive effects of AI, underprepared for the responsibilities they inherit and undervalued in a labour market that increasingly demands skills they were never taught.
In essence, the spread of Artificial Intelligence is both a technological shift and a structural transformation of the global labour market. AI is reshaping industries, cutting costs and displacing millions of roles worldwide. For students and recent graduates, traditional career pathways are narrowing and unpaid work is becoming a worrying substitute for training.
The CAINZ Digest is published by CAINZ, a student society affiliated with the Faculty of Business at the University of Melbourne. Opinions published are not necessarily those of the publishers, printers or editors. CAINZ and the University of Melbourne do not accept any responsibility for the accuracy of information contained in the publication.
