College Graduates this Year are Not Finding Jobs, AI is Partly to Blame

A new batch of university students is close to completing their educational journey and is keen on the corporate world. However, the job market doesn’t seem to be ready to accept these college students due to the unavailability of new jobs and profiles. The rise of artificial intelligence has been cutting down the jobs, as a result, unemployment rates for recent graduates are recorded to be at their highest level since 2021.

Jenna, aged 23, is a recent college graduate who was excited to have received a job offer letter from the federal government in January. However, by March, under the ongoing hiring freeze led by Trump and Elon Musk’s DOGE cuts, the offer letter had been put on hold.

“It’s been quite disorienting,” Jenna added, “I don’t think anybody saw this coming.” Jenna has just graduated from the University of Virginia with a bachelor’s degree in biology and a minor in data science. Having completed her education, she is now waiting for a full-time employment opportunity in the same field.

According to New York Federal Reserve Report, the recent college grads unemployment rates have jumped to 5.8% in the first quarter of 2025, as compared to 4.5% of last year. The underemployment rate has also rise to 41.2% compared to 40.6% in 2024.

Also Read: Manus AI Partners With Microsoft’s Azure AI Foundry

Talking about the graduation degrees that are facing the highest rates of underemployment are anthropology, physics, computer engineering, commercial art and graphic design, fine arts and sociology.

It seems that AI has definitely made it challenging to find a suitable job for the new graduates, as Jenna has applied for more than 100 other roles, but the limited opportunities are landing her nowhere. “I have no idea what this AI is trained to look for,” Jenna said, “I have no idea what the buzzwords are. I don’t know what the algorithm is… So I just feel like it’s even more of a crap shoot.”

There are millions of students like Jenna who are excited to begin a new part of their life, little do they know, the space for them to explore the new world is shrinking. Businesses are spending billions for implementing AI in their processes while reducing the reliability on human workforce. Tasks are now being performed with high speed and more accuracy with little to no human interventions.

According to the World Economic Forum, AI is expected to generate 170 million jobs while displacing 92 million existing jobs. So, 78 million new jobs are likely to be created, but there is a long way for current grads to learn about those jobs and earn an income.

Jesse Zmick, aged 34, is graduating with a master’s degree in cybersecurity from Old Dominion University and is concerned about the current job market. While Jesse is already working with the system administration team at the University of Virginia, he is still applying his expertise to explore the AI models to find better future roles.