New Study Indicates AI Might Already Be Displacing Entry-Level Tech Positions

The tech world is witnessing a transformative shift as AI is replacing human jobs significantly marking a decline in the hiring process that now focuses on fewer but more specialised hands, particularly those who can deliver immediate returns within the deadlines.

SignalFire's recently published 'State of Talent Report' for 2025 focusing on hiring and employment trends in the tech space and found that new tech grad hires at Big Tech firms in 2024 were down by 25% from the previous year, making up only 7% of hires during the year.

The report also noted an 11% decline in graduate recruitment at startups, where these talents made up just 6% of total hires.

Another recent survey from the World Economic Forum highlighted that 40% of employers intend to replace humans with AI in roles where tasks can be done with automation.

Why The Shift in Junior Tech Hires? AI Trends or More?

If there's anything companies look to drive through their value chain every day, it's efficiency. And that's what AI promises. But here's how that's watered down in tech in just a few ways:

• Costlier and More Complex Deployments

It's no surprise that tech firms — from global giants to nimble startups — are in constant pursuit of more: more acquisitions, more strategic partnerships, and more talent capable of outpacing the industry's rapidly rising knowledge bar. In a sector where global R&D spending totalled $2.8 trillion (£2.08 trillion) in 2023, the pressure to lead—or at least not lag—has intensified amid growing competition and a fast-shifting digital landscape.

Artificial Intelligence sits at the heart of this momentum. McKinsey's 2025 report reveals that 78% of companies now use AI in at least one business unit, a figure that has nearly quadrupled since 2017. For tech firms, the appeal is clear: faster deployment at lower cost. In a high-stakes, high-cost industry, anything that boosts value while trimming time to market becomes indispensable—not just a strategic advantage, but a necessity.

• Increased Need for AI-based Roles

Artificial Intelligence remains a fast-evolving frontier, with much still unknown about its full potential.

For companies investing heavily in the field, especially in machine learning and data engineering, precision is paramount. These roles demand deep technical expertise—far beyond what tech newcomers typically bring—as errors in such capital-intensive projects can prove both costly and time-consuming.

According to O'Reilly's 2023 AI Adoption survey, 64% of organisations have AI in production, leading to more demand for skilled tech talents.

In an environment where project cycles span months and budgets stretch into millions, there's little room for error—and even less for inexperience.

* The Need for Redirected Spending

A major factor behind the slowdown in entry-level tech hiring in 2025 is the need for redirected spending. With economic pressures mounting and investor scrutiny intensifying, many firms are reallocating budgets away from junior hiring towards high-impact roles in AI infrastructure, cybersecurity, and advanced data operations.

According to Gartner, global IT spending is expected to grow modestly by just 9.8% in 2025 — a conservative shift compared to previous years. As companies focus on fewer but more specialised hires, particularly those who can deliver immediate returns, entry-level candidates often fall by the wayside in favour of experienced professionals who can hit the ground running.

In all, AI seems to be the way forward—the answer to the questions around efficiency, whether it's the need for faster deployment at relatively lower costs, the need for more experienced hands to fill in more complex AI development roles, or the need to meet investor demands through optimised spending.

As a result, it's the tech rookies who are feeling the squeeze. But does this mark the beginning of the end for entry-level roles in the industry? Time—and shifting market trends—will tell. For now, what remains certain is that adaptation is part of the game. As the landscape continues to evolve, so will the opportunities it presents.