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AI’s Impact on the Job Market

AI is resulting in job cuts, but the effects are unevenly distributed. Younger tech workers are seeing the biggest impact. Learn what the latest research shows.

Dennis Chiuten

Sep 2, 2025

As we wrote recently in The Automator’s Dilemma, we at work.flowers have a strong interest in understanding how AI is affecting the job market. We believe that AI and automation should be tools that help people do more, rather than an excuse for cutting jobs.

Conflicting Research on AI and Jobs

Not surprisingly, there’s a growing body of research attempting to determine whether AI has had any discernible impact on employment. Perhaps also not surprisingly, the conclusions aren’t all aligned.

A few weeks ago, the New York Times reported the following finding from the Federal Reserve Bank of New York (emphasis added):

Among college graduates ages 22 to 27, computer science and computer engineering majors are facing some of the highest unemployment rates, 6.1 percent and 7.5 percent respectively…. That is more than double the unemployment rate among recent biology and art history graduates, which is just 3 percent.

Around the same time, Stanford economist Bharat Chandar published a paper concluding that there has been no substantial difference in employment or earnings growth between occupations most exposed to AI (like software development) and those least exposed (like nursing).

A Deeper Look at Early-Career Workers

Last week, Chandar and two Stanford colleagues released a follow-up paper with more granular data. The biggest takeaway (emphasis added again):

since the widespread adoption of generative AI, early-career workers (ages 22-25) in the most AI-exposed occupations have experienced a 13 percent relative decline in employment even after controlling for firm-level shocks.

In plain language, while overall employment growth for software developers and other AI-exposed jobs look stable, the youngest workers in these roles are losing ground - and the timing lines up with the launch of ChatGPT in late 2022.

Data from Stanford paper. Prettified version of the chart from The Wall Street Journal.

More broadly, the Stanford team looked across all occupations, grouping them into five quintiles based on their level of exposure to disruption from AI - 5 being the most exposed (software developers, customer support), and 1 the least (nursing, construction work). The results, shown below, are striking: among workers aged 22-25 in fields most heavily exposed to AI disruption, employment shrank by more than 5% between October 2022 and July 2025.

Meanwhile:

Employment grew by nearly 10% for workers aged 22-25 in the least AI-exposed occupations, and

Employment grew even in the most AI-exposed fields for older workers (albeit just barely for the 26-30 age band).

Why This Matters for Startup Leaders

While the research is still evolving, it seems clear that AI is already shaping the labour market, but that its effects are unevenly distributed. Younger workers in exposed fields like software development and customer support are bearing the brunt of AI disruption, even as the overall job market remains resilient.

For early-career professionals, adaptability and finding ways to build complementary skills around AI will be critical. When my 11-year-old daughter asks me what I think think should be when she grows up is, I tell her, “I don’t know, and neither should you.” It’s impossible to know what career paths will be relevant, much less lucrative or rewarding, 5 or 10 years from now, and so the skill that matters most is the ability to learn new skills. There will always be a need for critical thinking - everything else just feels like details.

But for startup founders and team leaders, there’s an equally important responsibility: recognise that your youngest team members may be feeling the sharpest impact. Supporting them - with training, mentorship, and opportunities to work alongside AI rather than be displaced by it - is going to be essential for building resilient teams that will stick with you through change.

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Dennis Chiuten