Artificial Intelligence (AI) is poised to bring major shifts to the job market, with entry-level white-collar workers expected to bear the brunt of the impact, according to a recent report from global investment bank Jefferies.

The report notes that the unemployment rate among recent college graduates in the United States has climbed to 5.8 per cent—well above the national average of 4 per cent and more than double the 2.7 per cent rate for all college graduates. This signals a worrying trend for young professionals trying to enter the workforce.

Jefferies stated, “We believe AI’s most significant impact for investors will be through labour disruption, beginning with entry-level roles,” pointing to growing challenges for first-time job seekers.

Dario Amodei, CEO of leading AI firm Anthropic, echoed these concerns, warning that AI could replace up to 50 per cent of entry-level white-collar positions within the next one to five years. He also cautioned that if these disruptions continue unchecked, unemployment could rise sharply, potentially reaching between 10 to 20 per cent.

The report highlights that jobs in sales, customer support, software development, and marketing—sectors that traditionally employ a large number of junior professionals—are particularly vulnerable to AI-driven automation.

Surprisingly, even graduates in technical disciplines are not immune. Unemployment among computer engineering and computer science graduates is 7.5 per cent and 6.1 per cent respectively—both above the national average.

The findings indicate that AI adoption is no longer confined to the tech sector. Jefferies found that 40 per cent of the 419 U.S. companies discussing AI during earnings calls since 2021 were from non-tech industries such as retail, finance, and healthcare.

While some industry leaders remain optimistic, the overall picture remains complex. IBM CEO Arvind Krishna said AI has enabled new roles and increased overall employment at the company. However, Klarna’s CEO admitted that replacing staff with AI had led to a decline in customer service, suggesting they may need to rehire human employees.

The report ultimately calls for urgent action from governments, educators, and businesses to reskill the workforce and prepare young professionals for a rapidly evolving labour market. Without intervention, the wave of automation led by AI could make it even harder for recent graduates to find stable employment.