AI Agents Could Push College Graduate Unemployment Above 30%, ServiceNow CEO Warns

Highlights

• Bill McDermott warned that widespread adoption of AI agents could push unemployment among recent college graduates into the mid-30% range within a few years.
• Companies are increasingly using AI tools to cut costs, automate tasks and slow hiring, especially for entry-level roles.
• Several tech leaders, including Andy Jassy, have said AI could reduce corporate headcount in the coming years.
• Despite the warning, current unemployment among recent graduates remains relatively low at about 5.7%, though underemployment is significantly higher.

Artificial intelligence could significantly reshape the job market for young professionals, potentially making it much harder for new graduates to find work. According to Bill McDermott, the rapid rise of AI agents may dramatically increase unemployment among college graduates over the next few years.

Speaking on CNBC’s Squawk on the Street, McDermott said the growing use of AI-powered digital workers could replace many entry-level tasks that traditionally helped graduates enter the workforce. As companies automate routine work, the unemployment rate for new graduates “could easily go into the mid-30s in the next couple of years,” he said.

AI Replacing Entry-Level Work

McDermott explained that businesses are increasingly relying on AI agents to handle tasks that were previously done by human workers. These systems can manage customer service requests, IT troubleshooting and administrative processes around the clock, making them highly attractive to companies seeking efficiency.

At ServiceNow itself, McDermott said the company’s AI tools have already automated around 90% of customer service use cases that once required human involvement.

This shift could make it more difficult for young workers to prove their value in corporate environments where AI performs much of the basic work that traditionally served as a training ground for early careers.

Companies Using AI to Cut Costs

Across the tech industry, firms are increasingly restructuring around AI. Companies are investing heavily in automation to improve productivity while reducing labor costs.

Some organizations have already begun trimming their workforce as they ramp up AI adoption. For example, fintech company Block announced plans to significantly reduce its workforce, while software firm Atlassian said it would cut roughly 10% of its staff as part of a broader shift toward AI investments.

Meanwhile, leaders like Andy Jassy have indicated that AI could allow companies to operate with smaller corporate teams in the future.

Current Job Market for Graduates

Despite the warnings, the job market for recent graduates has not yet reached crisis levels. According to data from the Federal Reserve Bank of New York, the unemployment rate for recent college graduates stood at about 5.7% at the end of 2025.

However, another indicator highlights underlying challenges: the underemployment rate reached 42.5%, meaning many graduates are working in jobs that do not require a college degree.

A Faster-Than-Expected Shift

McDermott believes the transformation driven by AI may happen faster than many people expect. As companies deploy more advanced AI systems and digital agents, businesses may rely less on large entry-level workforces.

While AI could create new kinds of jobs in the long term, the transition period may be difficult for young professionals entering the workforce.

“I do think it’s coming quicker than people anticipate,” McDermott said, referring to the speed at which AI is changing how companies operate.