JPMorgan’s consumer banking CEO recently said she’d “take the over” on cutting 10% of operations staff through AI. The stock went up. Investors loved it.
I’ve been thinking about what that actually means for people trying to start their careers right now.
What’s happening
Entry-level hiring at big tech companies has dropped about 50% from pre-pandemic levels. Internship-to-hire conversion rates fell from 58% to 53% last year. Doesn’t sound like much, but it’s the biggest single-year drop in half a decade.
Marc Benioff told Bloomberg that AI is doing 30 to 50 percent of the work at Salesforce now. They froze engineer hiring and were debating whether to hire anyone at all this year.
What you don’t hear in any of these announcements is anything about developing talent, or how someone entering the workforce today is supposed to learn the ropes, or where the next generation of senior people is going to come from.
It’s all efficiency metrics. Cost savings. Optimization.
Which is fine, I guess, if you’re planning to retire in five years and don’t care what happens after. You squeeze out the gains, pump the stock price, and let the next CEO figure out why nobody knows how anything works anymore.
It’s basically the private equity playbook, except instead of leveraged debt, they’re leveraging AI. Extract value, skip the investment in people, get out before anyone notices. They call it “AI transformation” but it’s just an LBO where the L stands for “Large Language Model.”
The prestige problem
There’s something interesting happening with corporate prestige. It’s a network effect. It only works if the next generation believes in it. If ambitious young people stop thinking “I need to get into Goldman” or “I need to make it to McKinsey,” those brands start meaning less.
Goldman Sachs is deploying “hundreds, maybe thousands” of AI coders. When they’re openly excited about replacing junior analysts with software, why would a Stanford CS grad dream about working there?
The people getting locked out aren’t sitting around feeling sorry for themselves, though.
What people are doing instead
Shut out of the traditional path, a lot of smart grads are just… building things. AI-native companies. Products. Businesses.
No ladder to climb means no ladder required.
This is the part that’s actually interesting to me. When you can’t get the junior analyst role, and you’ve got access to the same AI tools the big companies are using, the calculus changes. You can create value directly. Skip the years of dues-paying and PowerPoint-making and just make something.
The people who would have been grinding at McKinsey for five years before starting something aren’t just going to sit around all day. Necessity is the mother of all invention. These firms may be spawning their own competition out of this short-sighted cost-cutting.
The numbers are weird
Challenger, Gray & Christmas tracks layoffs. In early 2025, out of 286,679 total planned job cuts, exactly 75 were explicitly tied to AI.
That’s 0.026%.
So there’s this huge gap between the rhetoric and the reality. Executives are talking about AI replacing workers constantly, but so far the actual layoffs specifically caused by AI are tiny.
Which suggests we’re early. The narrative is way ahead of what’s actually happening. But narratives shape behavior. An entire generation is watching these announcements and drawing conclusions about whether corporate careers make sense for them.
Josh Bersin, who studies HR, says “almost every HR leader told me they are rebuilding their entry level development programs.” So some companies are noticing. The ones that aren’t are going to have a problem eventually.
What would actually make sense
If I were running a company thinking about this, I’d probably:
- Create roles where junior people learn to work with AI tools
- Evaluate interns on how fast they learn
- Build teams where humans and AI each do what they’re good at
But that requires thinking past the next earnings call, which is a lot to ask.
Where this goes
The ladder existed because ambition needs a path. If you remove the first few rungs, eventually you don’t have a ladder anymore. You just have executives who are going to retire and a bunch of AI tools with no one who really cares about the business.
McKinsey without analysts is just a brand. Goldman without hungry young associates is just a building in Manhattan. Nobody dreams of working at IBM anymore. The best kids wouldn’t even consider it. That’s where this leads.
The companies celebrating their AI-powered hiring freezes remind me of Kodak executives in 1975, feeling good about protecting the film business. They’re so focused on cutting costs today that they’re missing the people building the thing that replaces them tomorrow.