ServiceNow CEO Warns AI Could Push Graduate Unemployment to 35% in Years
ServiceNow CEO Bill McDermott has issued a stark warning that the rapid adoption of artificial intelligence (AI) could create major challenges for entry-level workers in the coming years. In an interview with CNBC's "Squawk on the Street," McDermott said AI-driven automation may significantly reduce the number of jobs available to recent graduates as companies increasingly rely on software agents to complete tasks.
AI Tools Changing Business Operations
McDermott explained that ServiceNow's AI software is designed to help companies automate many tasks that previously required human workers. According to him, the company's tools have already replaced many functions in customer service operations, with ServiceNow taking out 90% of the use cases that previously relied on humans in this area. He emphasized that this technology allows companies to grow revenue and free cash flow without increasing employee numbers, stating, "I do think it's coming quicker than people anticipate."
Workforce Changes Linked to AI Investments
McDermott highlighted that unemployment among new college graduates "could easily go into the mid-30s in the next couple of years." He added, "So much of the work is going to be done by agents. So it's going to be challenging for young people to differentiate themselves in the corporate environment." This trend is already visible in the industry, with recent examples including:
- Block Inc. announcing plans to cut nearly half of its workforce as more work becomes automated.
- Atlassian announcing job cuts affecting about 10% of its employees while increasing investments in AI.
Industry analysts note that AI tools are beginning to affect many white-collar jobs, including roles in software development and marketing, allowing companies to increase productivity while hiring fewer workers.
Broader Industry Impact
Leaders at other companies have also discussed using AI to change workforce structures. For instance, Alex Karp has expressed a desire to increase revenue significantly while reducing headcount, and Andy Jassy has indicated that corporate workforces may shrink as AI tools become more widely used. These developments underscore a growing shift in how businesses leverage technology to optimize operations, potentially at the expense of traditional entry-level positions.
The rapid integration of AI into corporate environments poses a critical challenge for the next generation of workers, who must adapt to a landscape where automation plays a dominant role in task completion and job availability.
