In recent years, U.S. employers have frequently cited AI as a reason to reduce hiring of college graduates. Now, some companies are reversing this narrative, stating that AI is instead increasing their demand for entry-level employees.

A major survey this year on employer graduate hiring plans reveals that among companies using or exploring AI, the number of executives planning to increase entry-level hiring by 2026 is nearly three times higher than those planning to reduce it. The survey, conducted by the Strada Education Foundation with approximately 1,500 employers, indicates that the most extensive users of AI are also the most optimistic.

The findings suggest that corporate expectations for the capabilities of young employees are evolving as rapidly as AI technology itself. Over 40% of respondents stated that as AI takes over routine administrative tasks traditionally handled by new graduates, the technology is introducing greater complexity and analytical responsibilities to entry-level positions.

Corporate restructuring of operations around AI remains in its early stages, and the long-term impact of the technology on employment is largely unknown. In recent years, many employers eager to control costs and reduce headcount have frozen or cut new graduate hiring, with some attributing this to AI. In March, the unemployment rate for recent graduates reached 5.6%, two percentage points higher than in 2019. In contrast, the overall unemployment rate of 4.3% increased by only a fraction of that amount.

Some employers are breaking with this cautious approach as they integrate AI. Life insurer MetLife expanded its intern and new graduate hiring by nearly 30% last year and anticipates further growth in entry-level staff by 2026. Bill Pappas, the company's Global Head of Technology and Operations, stated that entry-level roles are a "primary mechanism" for professionals to learn skills like leadership. Similarly, IBM, which also expanded entry-level hiring this year, believes such growth is essential for retaining talent over the next three to five years.

The notion that companies embracing AI would increase entry-level hiring may seem counterintuitive. However, Bryce Strauss, co-founder of Nominal, disagrees. The company develops software for hardware operations primarily for engineers in sectors like energy, aviation, and satellites.

"I am not at all surprised by these survey results," he said. Strauss noted that the company recently raised $80 million at a $1 billion valuation and uses AI "ubiquitously." It also plans to hire 10 new graduates this year, double the number from 2025.

He provided an example: a newly hired engineering graduate, using AI without direct supervision, built an analytics tool now utilized by the entire team. Embracing entry-level talent "has proven to be one of the best decisions we've made."

The three co-founders of Nominal even visit university campuses personally to recruit students. Strauss brings pizza to meetings of rocketry clubs and groups like the Formula SAE racing design and competition team. He said that through in-person meetings, he can identify outstanding talent whose written applications might otherwise get lost in the crowd. "It's an extremely high-return-on-investment approach."

AI remains unpopular among many Americans, largely due to fears it will eliminate numerous white-collar jobs, particularly impacting those early in their careers. At graduation ceremonies across U.S. universities this month, students booed when speakers, including former Google CEO Eric Schmidt, discussed AI.

Evan Reed, a 23-year-old graduate of Hamilton College, said he understands why some students and companies are wary of AI. However, he finds it highly practical. He specifically mentioned using AI, with his teacher's permission, to create slideshows and write mapping code for his thesis defense.

Reed will work as a project finance analyst in New York after graduation. He believes hiring undergraduates proficient in AI early gives companies a first-mover advantage.

"If you add just two or three people to your headcount, but have everyone managing AI agents, your team's effective size essentially grows by 10, 20, or even 25 people," he said. "You can close more deals, get more work done, because they create slides faster."

Scott Pulsipher, President of Western Governors University, stated that employers surveyed by the university are still hiring, but they want students with both work experience and AI proficiency. He pointed out that it is this skills gap that leads many graduates to face repeated rejections in their job searches.

Overall, in the Strada survey, respondent companies using AI were slightly less optimistic about entry-level hiring this year compared to last. The proportion of respondents planning to reduce entry-level positions increased from 13% to 17%. As the survey did not require companies to quantify the number of planned hires or cuts, the exact number of affected positions cannot be predicted.

E-commerce technology company Rokt hired about 160 entry-level employees in 2025. Co-founder and CEO Bruce Buchanan said the company expects a similar hiring scale this year, partly to seize talent while other companies pull back. Entry-level employees need several months to deeply understand the product before being formally integrated into their respective functional teams.

He noted that these entry-level employees will work closely with AI agents. Those who embrace AI can devote more time to core tasks like problem-solving, letting the technology handle more of the tedious grunt work.

He also highlighted a ripple effect of hiring new graduates skilled with AI: it causes "significant anxiety" among mid-career employees.

"If you spent 15 years to become a senior engineer, and now a fresh graduate can use AI agents to accomplish more than you in just 12 months, that is genuinely threatening," he said.