The American labor market is already starting to reflect the transformative impact of generative artificial intelligence (AI), with early signs of disruption emerging particularly in the tech sector. While AI’s widespread implementation is still in its infancy, recent data and expert insights suggest a notable shift is underway—especially for young professionals in technology roles.
Joseph Briggs, senior global economist at Goldman Sachs, shared his perspective on this evolving trend during a recent episode of the “Goldman Sachs Exchanges” podcast, which was previewed by CNBC. According to Briggs, though most organizations haven’t yet deployed AI at scale, its influence is already observable, particularly in hiring patterns.
Early Indicators of AI-Driven Job Shifts
Tech employment has traditionally been a growth engine for the U.S. economy, consistently increasing as a share of overall employment over the past two decades. However, that trend appears to be faltering.
“For the last 20 years, the tech sector has shown a remarkably linear growth trajectory in employment,” said Briggs. “But over the past three years, we’ve seen a slowdown. Tech hiring is now undershooting its expected trend.”
This pullback in hiring is especially affecting younger tech workers. Those between the ages of 20 and 30 have experienced a sharp rise in unemployment—up 3 percentage points since early 2025. This surge is disproportionately higher than the overall tech sector and other young demographic groups, suggesting that early-career roles are the most vulnerable to automation.
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The Generative AI Boom and its Ripple Effects
The release of OpenAI’s ChatGPT in November 2022 marked a turning point in how industries perceive and implement generative AI technologies. Since then, companies like Nvidia—now the world’s most valuable company—have seen explosive growth, driven largely by the demand for AI chips and infrastructure.
Generative AI has demonstrated an increasing ability to perform tasks once reserved for humans, including writing, coding, summarizing, and problem-solving. In some cases, AI tools are already producing work at a level comparable to junior software engineers. This rapid advancement raises important questions about job security in knowledge-based industries.
While AI can dramatically improve efficiency and lower costs, it also creates a dynamic where entry-level roles become obsolete or significantly diminished. Technology leaders are starting to acknowledge this shift more openly.
Tech Giants Embrace AI-Powered Productivity
Several major tech companies have publicly discussed the growing role of AI in their operations. Alphabet and Microsoft, for example, report that AI now writes about 30% of the code in certain projects. Meanwhile, Salesforce CEO Marc Benioff stated that AI handles as much as 50% of the workload in his organization.
This trend is a clear signal: companies are shifting toward an AI-assisted workforce, reducing the need for human labor in routine or easily replicable tasks. As a result, younger employees—often hired for such roles—are feeling the brunt of this transformation.
Briggs emphasized that this shift is not just anecdotal; it’s showing up in hard labor market data. He recently co-authored a report titled “Quantifying the Risks of AI-Related Job Displacement,” drawing from IPUMS data and Goldman Sachs Global Investment Research. The findings highlight the emergence of “labor substitution,” a process by which AI systems replace traditional job functions, particularly those requiring less experience or training.
Why Young Workers Are Most at Risk
Younger employees are typically assigned repetitive, entry-level tasks—making them the most susceptible to automation. George Lee, co-head of the Goldman Sachs Global Institute and former technology banker, explained that companies are becoming increasingly cautious in hiring junior talent as AI capabilities evolve.
“How do I streamline my enterprise to be more adaptive and flexible without compromising our competitive edge?” Lee asked rhetorically. “For now, young workers are a casualty of that optimization process.”
Lee’s comments reflect a strategic recalibration happening across industries. Firms are pausing on traditional hiring and instead evaluating how to integrate AI without adding headcount. This cautious approach results in fewer opportunities for early-career professionals to enter or remain in the field.
Forecasting AI’s Future Labor Market Impact
According to Goldman Sachs’ projections, around 6% to 7% of U.S. jobs could be lost to AI-driven automation in a baseline scenario. This transition, Briggs noted, will likely take place over the next decade. However, if the pace of adoption accelerates—due to rapid technological advancement or an economic downturn prompting cost-cutting—the disruption could be far more abrupt.
A sudden, widespread integration of AI could pose significant challenges for the labor market. Not only would job displacement increase, but the time required to retrain and redeploy affected workers might prove insufficient, especially in fields where AI proficiency is essential.
The Potential Impact of Artificial General Intelligence (AGI)
While current AI systems focus on narrow tasks, future developments could bring about artificial general intelligence (AGI)—AI that can learn and reason across a wide range of domains, much like a human. If AGI becomes reality, Briggs warns, its implications for the labor market could be far more profound.
“Our analysis doesn’t factor in the emergence of AGI,” he said. “It’s hard to even begin estimating the impact. But there’s no doubt it would lead to significantly more labor substitution and a disruptive effect on employment.”
AGI would challenge the very foundation of work as we know it, potentially reshaping not only entry-level positions but also highly specialized roles across industries. The ripple effect could impact everything from education and healthcare to finance and law.
Preparing for a New Employment Landscape
In light of these projections, economists and business leaders alike stress the importance of workforce adaptation. This includes investments in upskilling, reskilling, and policy reform to ensure that the labor force remains competitive in a world where AI is ubiquitous.
Education systems, for example, may need to pivot toward curricula that emphasize critical thinking, creativity, emotional intelligence, and AI fluency—skills that remain harder for machines to replicate. Meanwhile, governments and corporations may need to implement transition programs, such as wage subsidies, retraining grants, or job placement services, to support displaced workers.
For organizations, the challenge lies in striking a balance between automation and human talent. While AI can handle repetitive tasks with speed and precision, it lacks the empathy, judgment, and ethical reasoning that humans bring to the table.
Frequently Asked Questions
What did the Goldman Sachs economist say about AI’s impact on jobs?
Goldman Sachs Senior Global Economist Joseph Briggs stated that generative AI is already showing signs of job disruption, especially in the tech sector. While most companies haven’t fully deployed AI yet, hiring among young tech workers has notably slowed.
Why are young tech workers the most affected by AI disruption?
Young professionals often hold entry-level roles that involve repetitive or automatable tasks. AI tools can now perform many of these tasks, making early-career positions more vulnerable to automation.
Is the overall U.S. job market being affected by AI right now?
Not significantly—yet. While there are early indicators in the tech sector, most companies are still in the early phases of AI adoption. However, broader impacts are expected as AI becomes more integrated into business operations.
What is “labor substitution” in the context of AI?
Labor substitution refers to the process of replacing human workers with AI systems or automation. In this case, generative AI is being used to perform tasks traditionally done by junior employees, especially in programming and tech support.
How much code is AI currently generating in companies?
Companies like Microsoft and Alphabet report that AI is responsible for generating about 30% of the code in certain projects. Salesforce claims AI performs up to 50% of tasks within the company.
What percentage of jobs could AI eventually replace?
According to Goldman Sachs’ projections, 6% to 7% of all jobs in the U.S. could be displaced by AI automation over the next decade under a baseline scenario.
Could the impact of AI on jobs accelerate?
Yes. The disruption could happen more quickly if there’s a rapid technological breakthrough or an economic slowdown that forces companies to cut labor costs by adopting AI more aggressively.
Conclusion
The rise of generative AI marks a pivotal shift in the American labor market, with young tech workers already experiencing the first wave of disruption. While AI adoption remains in its early stages for most companies, the technology’s ability to automate entry-level and repetitive tasks is prompting a clear pullback in hiring, particularly in the tech sector.