Johnn Cabacungan, a 21-year-old from Los Angeles, flashed a toothy smile as he looked for his crew Saturday in the crush of people outside UC Berkeley’s California Memorial Stadium after commencement. A media studies major, Cabacungan has a string of internships at Adobe and other companies on his résumé and served as president of UC Berkeley’s consulting club. He’s the kind of gunner who in recent years would have had a cushy job waiting for him.
Instead, he has eight interviews lined up, including at major tech firms, but no certain roles.
“I’m scared, to be honest,” he said. “I’ve had trouble finding a job. Most people are having trouble.”
Graduating seniors are right to feel anxious about their career prospects. Compared with the situation a decade ago — or even a few years earlier — the job market facing this crop of graduates is grim.
Hiring of new grads by the 15 largest tech companies has fallen by more than 50% since 2019, according to a new report from VC firm SignalFire. While hiring for mid- and senior-level roles rebounded last year following mass layoffs across all levels in 2023, it declined at the entry level. The gap between the overall unemployment level and that of recent college grads recently reached an all-time high, according to census data.
Early in the pandemic, workers had an edge. Tech firms dramatically ramped up hiring, giving unprecedented economic power to workers at all levels, and the broad acceptance of hybrid and remote work widened the pool of potential employers. But that superheated job market gave way to waves of layoffs across Silicon Valley starting in 2023. Deep economic uncertainty is making employers think twice about investing in new hires, while AI is rapidly assuming job functions once reserved for interns and other early-career workers.
“Times have changed, and lean is in,” said Heather Doshay, SignalFire’s head of talent. “Companies are prioritizing experienced hires over junior talent, and we’re seeing smaller funding rounds, shrinking teams, fewer new grad programs, and the rise of AI all contributing to this downturn.”
Even Berkeley graduates who have jobs lined up are not thrilled about the state of the economy. Manas Chithirala, who majored in industrial engineering and is set to work as an engineer at Walmart, said he simply “got lucky.”
Billy Meneses, 21-year-old public policy student, said he’s seen job prospects change dramatically since he started at Stanford University three years ago. “I don’t think college is going to guarantee you a job at all,” Meneses said. “Even at a place like Stanford, it may be easier, but it’s still hard if you aren’t developing hard skills.”
The draw of attending UC Berkeley or Stanford has long been the access they provide to the job- and wealth-creation machine of nearby Silicon Valley. But the excited spring small talk about interviews and offers has increasingly been replaced by fretting about the future.
“It used to be the land of milk and honey, where students had considerable choice,” said Paul Ganting, director of career services at San Francisco State’s business school. “But that abundance just isn’t there anymore.”
A tale of two job markets
Before the pandemic, new grads accounted for 15% of hires at Big Tech companies; now, the figure is 7%. Meanwhile, startups, which used to be a haven for those unable to land gigs at the so-called Magnificent 7, are shrinking in headcount and hiring less entry-level talent.
Since 2021, the average age of technical hires has increased by three years, as companies become increasingly unwilling to invest in training junior talent, according to SignalFire. AI isn’t the only culprit, but it’s a significant one, as Salesforce, Shopify, and other firms have explicitly said they are looking to meet their growth needs with code rather than humans.
James O’Brien, a computer science professor at UC Berkeley who advises startups, said it used to be common for seniors, fresh out of summer internships, to receive five-figure sign-on bonuses on top of six-figure job offers from multiple Big Tech companies. Today, as many of his students struggle to land post-graduation jobs, the startups he’s working with are shunning entry-level employees.
“Right now, the only type of employee anybody’s interested in hiring is a relatively heavyweight senior person who is very technical,” O’Brien said. Previously, startups would typically hire one senior person and two or three early-career coders to assist, he said. But AI holds advantages over those junior employees.
“They ask, ‘Why hire an undergraduate when AI is cheaper and quicker?’” said O’Brien, adding that while AI-generated code isn’t top-tier, neither is code written by new grads. The key difference, he said, is that the iterative process to make AI code better takes minutes, while a junior coder might need days for the same task.
In an op-ed comparing the current market to the hollowing out of the U.S. manufacturing sector in the 1980s, Aneesh Raman, LinkedIn’s chief economic opportunity officer, identified entry-level office jobs as those most at risk from AI. Raman cited a workforce confidence survey showing that Gen Z is the cohort most pessimistic about finding or holding employment, and the gap between workers in that generation and those that came before it has widened in the last year.
“It’s a tale of two very different job markets,” O’Brien said. “Entry-level people are abundant, and there aren’t that many jobs for them. Advanced people are few and in high demand.”
Seeing the dearth of opportunities, many graduating seniors are forgoing the entry-level rat race and setting their sights on grad school.
“The process of getting a job is supposed to be hard and competitive, but right now things are way more aggravated,” said one 24-year-old biology graduate at UC Berkeley. He applied for more than 40 jobs at biotech companies without landing one and is headed to grad school in the hopes of attracting more interest from employers. (Reflecting a different strain of turmoil, he declined to share his name over concerns about his visa status as an international student.)
Not all new graduates are feeling disadvantaged by AI. Katsuya Masaki credited it with helping him earn his master’s degree in informational technology at Berkeley after getting a bachelor’s in economics at Kyoto University. He leaned on AI to learn more quickly and practice for job interviews, he said.
“I don’t think I could have graduated without AI,” said Masaki, who is starting a job at a fintech company in the summer. “For me, AI is a friend. It’s not going to steal my job.”
O’Brien, who has been helping his students apply to grad school in greater numbers than usual, is skeptical that advanced degrees will be the solution as AI advances at breakneck speed.
“It’s a race now between how quickly they can get their Ph.D. or master’s degree and how quickly the AI will advance to that point,” he said.
The experience paradox
Rob Giani is one of the lucky ones. The Bay Area native, a senior at Loyola Marymount University in Los Angeles, is moving to San Francisco after graduation to work for financial technology startup Ramp. He also runs an intercollegiate community in Southern California for student entrepreneurs.
“There’s genuinely nothing available,” Giani said, adding that he’s one of the only students in his social circle who has landed a job. “The mood is bleak.”
It’s especially jarring for international students who majored in computer science with the expectation that a high-paying tech job would be awaiting them.
“There’s a strong frustration if you’re looking for a Big Tech job. You now have to be technically ‘cracked’ for those opportunities to be available to you,” Giani said, deploying a Gen Z term for “insanely talented.”
As college students doomscroll LinkedIn and Handshake (a career social network geared toward Gen Z), all they see are postings for roles that require experience they don’t have. In the Bay Area, more than 80% of entry-level jobs posted in the last year required at least two years of experience, according to data from Lightcast.
“I hear a lot of, ‘OK, well, I want that [senior role], but there’s no way to get there,’” Giani said.
According to Glanting, who leads career services at San Francisco State’s business school, internships are more important than ever in getting early career experience. But companies are scaling back internship programs at the same time they are cutting entry-level roles.
Forget the job ladder — even the step stool is being snatched away. This season, internships in tech attracted roughly 2.5 times as many applications as they do in the average year, according to Glassdoor. Data science and software engineering internships are more than six times more competitive than average.
Daniel Cao, who runs Glassdoor’s internal internship program, has seen an uptick in recent graduates applying for summer internships instead of full-time employment.
“Internships are evolving into a stepping stone for not only students but also early-career professionals navigating a challenging job market,” Cao said.
While the market offers dim prospects for graduates, the future might involve no job at all. O’Brien has characterized the AI-induced economic disruptions as an imminent storm. His answer? A universal basic income funded by taxing the AI systems that will eventually be doing the bulk of society’s work.
“We have a choice in front of us: dystopian inequity or a bright world with ample resources for all,” the professor wrote in an essay advocating for the policy. “Unfortunately, the default if we do nothing is the dystopian one.”