Artificial intelligence is fundamentally transforming the US employment landscape, with young technology workers bearing the most significant impact, according to a comprehensive analysis by Goldman Sachs. The investment bank’s chief economist, Jan Hatzius, confirmed that AI’s influence on employment is now clearly visible in labor market data.
The timing is striking: the tech sector’s share of US employment peaked in November 2022 — the exact month ChatGPT launched — and has declined below its historical trend ever since. This correlation underscores the rapid impact of generative AI tools on the technology workforce.
Young tech professionals aged 20-30 have experienced the sharpest consequences. Their unemployment rate has surged by nearly 3 percentage points since early 2024, representing more than four times the increase seen in the overall jobless rate. This dramatic spike serves as concrete evidence that generative AI is beginning to displace white-collar positions, particularly targeting entry-level and early-career workers who traditionally filled roles now being automated.
Goldman Sachs projects that generative AI will eventually displace 6-7% of all US workers over the next decade. However, the firm anticipates the transition will be relatively manageable, with peak unemployment impact limited to approximately 0.5 percentage points as displaced workers find opportunities in other industries.
These findings arrive during a period of broader labor market weakness. July’s disappointing jobs report showed only 73,000 new positions — significantly below the 106,000 economists expected — with May and June figures revised downward as well. Hatzius characterized current US growth as “near stall speed,” warning of self-reinforcing labor market deterioration.
While AI represents a significant long-term challenge, Goldman identifies near-term economic headwinds as more pressing concerns. The firm estimates real GDP grew at just 1.2% annualized in the first half of 2025, attributing the slowdown partly to higher tariffs. Analysts expect similarly sluggish growth continuing through year-end, with tariff pass-through to consumer prices and weak job growth constraining disposable income and consumer spending.
Tech industry leaders have issued stark warnings about AI’s employment impact. Anthropic CEO Dario Amodei predicted in May that AI could eliminate 50% of entry-level white-collar jobs within five years, reinforcing concerns about an impending jobs crisis for young professionals entering the workforce.
Key Quotes
It is true that AI is starting to show up more clearly in the data
Jan Hatzius, Goldman Sachs’ chief economist, made this statement in a Monday research note, marking a significant acknowledgment from a major financial institution that AI’s employment impact is now empirically measurable rather than merely theoretical.
While this is still a small share of the overall US labor market, we estimate that generative AI will eventually displace 6-7% of all US workers
Hatzius provided this long-term projection, indicating that millions of American workers will need to transition to new roles over the next decade as AI automation expands across industries.
Friday’s jobs numbers reinforced our view that US growth is near stall speed — a pace below which the labor market weakens in a self-reinforcing fashion
Hatzius connected weak July employment data to broader economic concerns, suggesting that AI displacement is occurring during an already fragile labor market recovery, potentially amplifying negative effects.
AI may eliminate 50% of entry-level, white-collar jobs in the next five years
Anthropic CEO Dario Amodei issued this warning in May, representing one of the most aggressive predictions from AI industry leadership about near-term job displacement, particularly affecting young professionals entering the workforce.
Our Take
Goldman Sachs’ analysis marks a watershed moment in the AI employment debate, moving the conversation from speculation to data-driven reality. The November 2022 inflection point is particularly revealing — ChatGPT’s accessibility democratized AI capabilities, enabling companies to rapidly implement automation without extensive technical expertise. What’s most concerning is the concentration of impact among young workers, suggesting AI is specifically targeting the routine, entry-level tasks that have traditionally served as workforce onboarding mechanisms. This creates a potential “experience gap” where future mid-career professionals lack foundational skills. The relatively optimistic 0.5 percentage point peak unemployment projection assumes smooth labor reallocation across sectors — a significant assumption given that displaced tech workers may lack skills for available positions in other industries. The confluence of AI displacement with tariff-induced economic slowdown creates a particularly challenging environment for workforce adaptation and retraining initiatives.
Why This Matters
This analysis represents the first major confirmation from a leading financial institution that AI’s job displacement effects are measurable and accelerating. The correlation between ChatGPT’s launch and tech employment decline provides concrete evidence that generative AI tools are moving beyond theoretical disruption to real-world workforce impact.
The disproportionate effect on young workers raises critical concerns about career pathway disruption for an entire generation. Entry-level positions traditionally serve as training grounds where workers develop skills and experience. If AI eliminates these roles, it could create a “missing rung” on the career ladder, potentially leading to long-term skill gaps and reduced economic mobility.
For businesses, this signals an urgent need to balance AI adoption with workforce transition strategies. Companies implementing AI tools must consider retraining programs and role redesign to avoid talent loss and maintain institutional knowledge. The 6-7% displacement projection over a decade suggests organizations have time to plan, but the accelerating pace among young tech workers indicates the window for action is narrowing rapidly. This trend will likely influence policy discussions around AI regulation, worker retraining initiatives, and social safety net reforms.
Recommended Reading
For those interested in learning more about artificial intelligence, machine learning, and effective AI communication, here are some excellent resources:
Recommended Reading
Related Stories
- The Impact of AI on Software Engineering Jobs and Market Outlook
- Sam Altman’s Bold AI Predictions: AGI, Jobs, and the Future by 2025
- Tech Workers Are the Real Winners in the AI Talent War, With Pay Set to Soar by 2024
- Perplexity CEO Predicts AI Will Automate Two White-Collar Roles by 2025
- The AI Hype Cycle: Reality Check and Future Expectations