AI has created a tough job environment for entry-level workers and things aren’t getting better anytime soon — even those with AI capabilities now need “senior-level” skills to land a job.

“AI-exposed entry-level roles are seven times more likely to require traditionally senior-level skills such as judgement and leadership,” consulting firm PwC said in a study released this month.

That’s because AI is changing the traditional career ladder. Companies are increasingly looking for candidates that use the cutting-edge tools and services to amplify their performance and grow faster. “Organizations must rethink how they mentor and train junior staff, helping them step up to complex decision-making much earlier in their careers,” PwC said.

Entry-level job seekers with or without AI skills are already dealing with stagnant wages,  layoffs, and stalled hiring. 

(The PwC findings echo similar concerns raised late last year in McKinsey’s State of AI report. Many companies are reducing headcount by deploying AI agents to take over entry-level jobs.)

Early-career AI job postings “have flatlined in highly AI exposed sectors,” and listings for junior roles with mid-career or senior-level skills have grown 35% since 2019, PwC said.  The consulting firm largely discounted the notion that AI is taking jobs away, though other studies point in the opposite direction. 

By the end of May, AI-driven job cuts had reached 87,174 for 2026, already outpacing the total of around 54,836 in 2025, according to figures released by Challenger, Gray and Christmas earlier this month.

The AI-driven layoffs haven’t reached the “jobpocalypse” stage yet, and workers are more productive with it, said Andy Challenger, chief revenue officer at Challenger, Gray and Christmas. But companies are rethinking hiring and long-term operational strategies as AI becomes a routine component in daily workflows and processes, he said.

Businesses are “restructuring aggressively as they reposition for an AI-driven economy,” he said.

That’s putting downward pressure on entry-level hiring as AI tools absorb more routine work, said Kye Mitchell, head of Experis US, a part of ManpowerGroup. “That doesn’t remove opportunity, but it changes the expectations. Employers now expect candidates to come in with hands-on experience, AI familiarity, and the ability to contribute faster,” Mitchell said.

Compensation remains strong for specialized, in-demand skills, while more commoditized roles such as customer service, helpdesk, and some entry-level positions  are flattening. “The shift overall is toward skills-based hiring, where demonstrable capability matters more than credentials alone,” Mitchell said.

Graduates who combine technical fundamentals with practical experience, AI fluency and strong communication skills stand out quickly. Job candidates can’t rely solely on academic credentials. 

“Employers are moving away from ‘train-from-scratch’ hiring and looking for talent that can contribute earlier and continue to adapt,” Mitchell said.

The PwC study also focused on the productivity gap between companies that have invested heavily in AI and companies lagging in adoption.

Since ChatGPT showed up in 2022, AI-exposed companies have seen productivity gains of 40% versus other companies. “The companies achieving the biggest productivity gains from AI are not using it only to cut costs,” PwC said.

AI-forward firms are also raising headcounts and wages. “Far from being a job killer, AI may actually be a job expander when used to unlock growth and enter new markets,” PwC said. 

Workers who use their domain expertise to supplement AI tools can advance, with AI-exposed roles “2.5 times more likely to rely on skills like empathy, judgement, and creativity that become even more valuable as AI absorbs some routine work,” PwC said.