As artificial intelligence reshapes the workplace, the decline of entry-level roles could weaken the talent pipeline and contribute to long-term skills shortages across industries.
AI tools are already automating a wide range of tasks across customer service, marketing, software development, and human resources. While organisations are using these tools to improve efficiency and reduce costs, experts warn the shift could disrupt how future talent is developed.
Scientia Professor Toby Walsh, Chief Scientist at the UNSW AI Institute, says the challenge is not simply what AI can do, but how organisations choose to use it.
“AI is a wonderful technology, but you’re the best people to solve your business problems,” he says.
He argues that businesses risk missing opportunities if they treat AI as a replacement for people rather than a tool that supports them.
Are AI-related job cuts always driven by AI?
As companies accelerate investment in artificial intelligence, reports of layoffs and restructuring have become more common. However, Professor Walsh says not all job cuts attributed to AI are necessarily caused by the technology itself.
He notes that while organisations are making significant AI investments, many are still working to realise returns on that spending.
“There’s a bit of AI washing,” he says.
He explains that some companies may frame redundancies as AI-driven to present a more strategic narrative to investors, even when broader management or financial pressures are involved.
According to Professor Walsh, this can create a distorted perception that AI is eliminating jobs faster than it actually is.
What happens when AI replaces entry-level jobs?
While some claims about AI-driven layoffs may be overstated, Professor Walsh says entry-level roles are already being affected as AI systems take on tasks traditionally used to train graduates and early-career professionals.
He says these roles are a critical part of organisational development pipelines.
“Most business organisational structures are pyramids,” he says.
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He warns that reducing entry-level hiring could create long-term capability gaps.
“Where are those middle managers and higher managers going to come from?” he asks.
He adds that students are already experiencing the effects, with fewer entry-level opportunities available and increased difficulty gaining initial industry experience.
The skills AI cannot replace
As AI becomes more capable, Professor Walsh says human skills such as judgment, communication, empathy, and social intelligence will become more important.
“Those are the things that distinguish us from the machines,” he says.
He notes that the biggest challenge for many professionals is not competition with AI, but adapting to work alongside rapidly evolving tools.
While AI can significantly boost productivity in fields such as programming, he warns that over-reliance may come at a cost.
“Unless you put the effort in, you don’t learn,” he says.
He adds that excessive dependence on automation could limit the development of deeper expertise over time.
How businesses can prepare for an AI future
Professor Walsh says the key question for business leaders is how they choose to use the productivity gains AI creates.
He says organisations could use efficiency gains to reduce headcount or reinvest them into improving products, services, and customer engagement.
“You’ve got a choice now,” he says.
He argues that companies that invest in workforce capability and AI literacy will be better positioned for the future than those focused solely on cost reduction.
“The most valuable thing a business has is people,” he says.
He adds that organisations should prioritise enabling employees to use AI effectively rather than replacing them.
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