AI’s Impact on Workforce: Who Will Survive?

Last month, Amazon CEO Andy Jassy stated that the company’s future adoption of artificial intelligence would likely lead to a reduced workforce over the coming years. His comment added fuel to a growing sense of unease among employees already concerned about AI replacing human labor. These worries intensified when, just two weeks later, Microsoft revealed plans to lay off around 9,000 staff—roughly 4% of its total workforce.

It’s becoming increasingly clear that AI has the potential to significantly disrupt the job market, especially for white-collar professions. But a crucial question remains: who will be most affected? Jassy’s statement came amid an ongoing debate about which groups of workers—novices or veterans—will bear the brunt of this technological shift.

Some industry experts argue that newer, less experienced workers are at the greatest risk. Their reasoning is straightforward: entry-level tasks tend to be more routine and easier to automate, making them the first targets for AI-driven efficiency. Dario Amodei, CEO of the AI company Anthropic, recently told Axios that he believes AI could eliminate up to 50% of all entry-level white-collar roles within five years. Recent increases in unemployment rates among recent college graduates have further fueled concerns—though it’s important to note that these trends don’t definitively link back to AI.

Conversely, some leaders in the AI space suggest the opposite—that seasoned professionals may be more vulnerable in the long run. Brad Lightcap, COO of OpenAI, shared in a New York Times interview that AI might pose greater challenges for long-standing employees who are used to doing things in a particular, perhaps outdated, way. According to Lightcap, this group may struggle to adapt to the evolving nature of their roles as AI becomes more integrated into the workplace.

The implications of these differing perspectives are far-reaching. If entry-level roles are the ones most likely to vanish, this could demand a reevaluation of higher education—raising questions about the current value of a college degree or how universities prepare students for the job market. On the other hand, if experienced workers are most affected, the result could be widespread economic instability and social unrest, especially as layoffs among established professionals become a common occurrence.

David Furlonger, a vice president at the research firm Gartner who oversees CEO surveys, has reflected on these potential consequences. “What happens to displaced senior workers? Who supports them? What will the loss of income mean for government tax revenues?” he asked, emphasizing that policymakers will need to consider these outcomes seriously.

Is AI Creating Better Leaders or Replacing Them?

Economists and labor researchers examining AI’s role in the job market have not reached a consensus on who is more at risk. However, looking more closely at sectors where AI has already been implemented offers some telling signs.

According to payroll data from ADP, industries such as tech and customer service—which have embraced AI most aggressively—have seen a steep decline in employment among workers with less than two years of experience. In tech-related roles, employment for junior workers peaked in 2023 but has since fallen by 20–25%. At the same time, employment among workers with greater tenure in those same sectors has risen. Ruyu Chen, a researcher at Stanford University, analyzed these figures and highlighted the shift as a potential early indicator of how AI is reshaping job hierarchies.

Other studies back this up, albeit indirectly. In early 2023, Italy temporarily banned ChatGPT, an AI tool frequently used by developers. Researchers from the University of California, Irvine, and Chapman University studied how this affected Italian programmers’ productivity, comparing them with their counterparts in France and Portugal who still had access to the tool. Their findings were revealing: while AI helped junior developers speed up basic tasks, it had a more transformative effect on mid-level developers. These more experienced professionals used the tool not just to complete their own work, but also to assist colleagues and contribute across multiple programming languages—skills that broadened their overall impact within their teams.

According to co-author Sarah Bana, this reinforces the idea that AI amplifies the effectiveness of skilled workers by enabling them to help others more efficiently. She argued that companies may soon hire fewer junior developers, since AI helps complete basic tasks with fewer hands, but more mid-level developers whose impact is enhanced by AI.

Still, not all experts agree that mid-career professionals are safe. Danielle Li, an economist at MIT who studies AI in the workplace, believes there are scenarios where AI poses a greater threat to skilled workers than to their less experienced colleagues. Her reasoning is that AI can increasingly perform tasks once associated with specialized human knowledge. With the right tools, a non-engineer could write code, or a non-lawyer could draft legal documents.

“That’s bad news for experienced professionals,” Li explained. “Their high wages are often justified by the uniqueness of their skill sets. But if AI can replicate those abilities, that uniqueness—and the compensation it commands—diminishes.”

However, Dr. Li was quick to note that the situation isn’t necessarily bright for entry-level workers either. She suggested that recent increases in graduate unemployment might reflect a broader slowdown in hiring due to AI’s growing capabilities, rather than a targeted reduction in entry-level roles. When companies expect to need fewer employees overall, new graduates often struggle the most—simply because they haven’t yet entered the workforce.

Some businesses have already begun making adjustments. Robert Plotkin, a partner at a boutique law firm focused on intellectual property, noted that AI has had a more noticeable impact on his firm’s need for experienced contract lawyers than on junior roles like paralegals. While paralegals handle standardized tasks such as document formatting, more senior contract lawyers—who once drafted patent applications—are now used less frequently. Plotkin said that with the help of AI tools, he can often create drafts faster himself, except in particularly complex technical areas.

“I’ve become very effective at leveraging AI to speed up my own work, reducing our need for external legal support,” he said.

This sentiment is reflected in recent staffing decisions at some of the most AI-forward companies. Google, Meta, and Amazon have all carried out substantial layoffs since 2022. Microsoft, for instance, laid off 6,000 employees, including software developers, just two months before its latest round of cuts—which impacted many middle managers.

“Routine tasks—like those involving spreadsheets, emails, or document tracking—are particularly vulnerable,” said Furlonger from Gartner. “AI can handle these activities, freeing up managers to focus on mentoring. But CEOs are beginning to question whether they still need as many managers as they once did.”

The Emerging Value of Youth and Adaptability

Gil Luria, an equity analyst at D.A. Davidson who covers Microsoft, believes layoffs are being driven by a combination of cost-cutting and strategic AI investment. Companies are pouring resources into AI infrastructure such as chips and data centers. Meanwhile, they’re also identifying areas where automation can replace even high-level employees, especially those unwilling to adopt new tools.

“Microsoft is crunching the numbers—evaluating who’s delivering results, who’s being overpaid, and who is or isn’t embracing AI,” said Luria. “Some senior engineers are thriving with AI. Others insist it can’t do the job, and those are the ones being let go.”

Harper Reed, CEO of 2389 Research, a company developing AI agents to assist with business tasks, echoed this view. He believes that the real cost savings lie not in eliminating junior employees, but in empowering them. “You don’t fire your cheapest workers,” Reed said. “You invest in them—give them AI tools that let them perform like much more expensive staff.”

Several studies support this concept. Research from Microsoft and three universities found that junior software engineers saw greater productivity gains from using AI coding assistants than their more experienced peers. In other words, the right AI tools can make less experienced employees much more effective.

Reed noted that this creates a compelling business case for companies to reorganize their staffing models. Firms might employ a small number of senior professionals to oversee operations while relying on junior employees, augmented by AI, to handle the bulk of the work—effectively replacing many mid-level roles. This, he said, is the exact model his company follows.yees who used A.I. to do what was once midlevel work, a handful of senior employees to oversee them and almost no middle-tier employees. That, he said, is essentially how his company is structured.