ServiceNow CEO Bill McDermott cautions that the rapid adoption of AI agents in business could elevate unemployment for new college graduates to over 30% within a few years, as companies automate tasks to cut costs and boost productivity.
CEO's Stark Warning
In an interview on CNBC's "Squawk on the Street," McDermott stated that unemployment for recent graduates "could easily go into the mid-30s in the next couple of years." He emphasized that AI agents are handling increasing workloads, making it harder for young professionals to distinguish themselves in corporate environments.
Current Unemployment Trends
Data from the Federal Reserve Bank of New York indicates that the unemployment rate for recent college graduates was about 5.7% at the end of 2025. The underemployment rate, where graduates work in jobs not requiring a degree, hit 42.5%—the highest level since 2020.
Corporate AI-Driven Job Reductions
Multiple companies are leveraging AI to downsize their workforces:
- Block announced plans to cut nearly half its workforce due to AI automation.
- Atlassian, which saw its stock drop 54% this year over AI disruption fears, is laying off about 10% of employees to fund AI investments.
- Palantir's CEO aims to grow revenue tenfold while reducing headcount.
- Amazon's CEO confirmed that AI tools will lead to a shrinkage in corporate staff.
AI's Impact on White-Collar Roles
Experts note that AI is advancing into white-collar sectors like coding and marketing, enabling firms to maintain output with fewer workers and curtail new hiring.
ServiceNow's Automation Solutions
McDermott highlighted that ServiceNow's software has automated 90% of customer service tasks previously done by humans. He argued that such tools help businesses lower hiring expenses while increasing free cash flows and revenue.
Accelerated Transition
McDermott stressed that the shift to AI-driven operations is unfolding faster than anticipated, signaling imminent workforce disruptions.
