For recent college graduates, particularly those from Gen Z aiming at careers in technology, the job market has become unexpectedly unforgiving. What just a few years ago seemed like a steady ladder into economic stability has continued into a second year of slower hiring, limited entry-level positions, and uncertainty about the future of work. At the root of the problem are complex and overlapping economic, political, and technological forces that have reshaped hiring outlook for employers and expectations for new graduates.
One of the standout causes in the tech world has been the rise of artificial intelligence, not simply as a “trend,” but as a force changing how companies structure teams and what kinds of workers they need.
Economic and Political Uncertainty Affecting the Job Pool
While the U.S. economy has continued to grow in aggregate terms, that growth hasn’t translated into robust hiring, especially at the entry level. Employers are cautious about expanding their workforces amid economic ambiguities, taking into account concerns such as fluctuating interest rates and unpredictable political and regulatory shifts affecting trade, to immigration, tech policy, and corporate taxes. As Forbes noted in late 2025, recent graduates are entering one of the most structurally complex labor markets in decades, where employer caution and long-term planning uncertainty are limiting new hiring.
AI is “partly to blame” for the shrinking pool of entry-level jobs, particularly in industries like tech that historically hired large numbers of new graduates. Tasks once assigned to junior developers like writing basic code, debugging, drafting documentation, and analyzing datasets are increasingly automated by generative AI systems. Companies are still hiring, but they are hiring differently. Rather than building large entry-level cohorts, many firms are investing in smaller teams of experienced workers who can manage AI tools effectively.
For Gen Z graduates, this creates a painful paradox: they trained for jobs that technically still exist, but the structure of those jobs has changed.
What New Grads Can Do to Stay Competitive
While the landscape is challenging, it is not without opportunity. The rules have shifted and those who adapt strategically can still gain traction.
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Develop AI Fluency, Not AI Fear
Rather than viewing AI as competition, graduates should position themselves as collaborators with AI tools. Employers increasingly value candidates who know how to prompt, evaluate, and integrate AI systems into workflows. Demonstrating the ability to use AI to improve productivity, while applying human judgment and oversight, makes a candidate more relevant, not less.
How can this be applied: Try building and showcasing portfolio projects that show AI-assisted coding, automating workflows, or using AI for data analysis. Being able to explain how and when to use AI responsibly is a differentiator.
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Build Experience Even Outside Traditional Roles
It’s a frustrating conundrum – jobs are requiring experience, but if you can’t get hired, howe will you ever gain it? It’s time to get creative, and that is often in the creative field. Freelancing, contract work, open-source contributions, internships (even post-graduation), and project-based collaborations all help close the “experience gap.” Employers are increasingly skills-first in their evaluation. A strong GitHub portfolio or documented project history can be more impressive than formal education requirements and GPA.
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Expand Beyond Traditional Tech Industries
Many job-seekers will use narrow searches for roles like “software engineer” or “IT analyst.” But since tech skills permeate all industries, like healthcare, finance, government, education and more, you can broaden the search to industries that might title their tech professionals differently. Using terms like digital operations, cybersecurity compliance, systems support, or data roles may serve up roles from non-tech companies and uncover overlooked opportunities.
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Strengthen Soft, Human-Centered Skills
As automation handles routine tasks, soft skills become more valuable. Communication, cross-functional collaboration, adaptability, and critical thinking are harder to automate. Employers increasingly look for candidates who can translate technical work into business value.
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Consider Alternative Entry Points
Apprenticeships, rotational programs, startups, government fellowships, and even smaller regional firms may offer more hands-on exposure than major tech corporations. Some graduates are also pursuing short-term certifications in cloud computing, cybersecurity, or data analytics to increase specialization.
The current hiring climate reflects economic caution and technological transition but not the disappearance of opportunity altogether. AI is reshaping work, but it is also creating new categories of jobs that reward adaptability and continuous learning.
For Gen Z graduates pursuing tech and IT careers, success may require a more entrepreneurial mindset: building proof of skills, embracing AI as a tool, and widening the definition of what a “first job” looks like. The market is changing and those who evolve with it will be best positioned to thrive.