'Unemployment Could Rise Sharply': Jefferies Big Warning On AI
New Delhi:
The impact of Artificial Intelligence (AI) on the job market is expected to fall on entry-level white-collar workers, says a report by Jefferies. The report highlighted that the unemployment among recent college graduates in the United States is now at 5.8 per cent, which is higher than the national average of 4 per cent and more than double the 2.7 per cent rate for all college graduates.
Jefferies said, "We believe AI's most significant impact for investors will be through labour disruption, beginning with entry-level roles".
This indicates that young people just entering the workforce are struggling more than others to find jobs.
AI is seen as one of the key reasons behind this shift. The report mentioned that Dario Amodei, CEO of AI firm Anthropic, has predicted that AI could replace 50 per cent of entry-level white-collar jobs within the next 1 to 5 years.
He also warned that unemployment could rise sharply, even reaching 10 per cent to 20 per cent if the trend continues.
The report also pointed out that many of the affected jobs are in fields like sales, customer support, software development, and marketing, areas where junior employees make up a large part of the workforce.
Even technical degrees are not a safe bet anymore. Recent graduates in Computer Engineering and Computer Science are among those facing higher-than-average unemployment rates, at 7.5 per cent and 6.1 per cent respectively.
Interestingly, it's not just tech companies talking about AI anymore. Jefferies found that out of 419 U.S. companies discussing AI in their earnings calls since 2021, 40 per cent are from non-tech sectors like retail, finance, and healthcare.
Despite job losses in some areas, the report also shared mixed views from business leaders. IBM CEO Arvind Krishna said AI has helped the company invest in new roles, and total employment has actually gone up.
However, Klarna's CEO admitted that replacing staff with AI led to poorer customer service and may force them to rehire people.
Overall, the Jefferies report paints a complex picture. While AI brings opportunities for businesses to grow and improve efficiency, it also creates risks for young workers trying to start their careers.
The report suggested that companies, governments, and educators must act fast to help people gain new skills and adapt to this changing job market.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
34 minutes ago
- The Hindu
AI startups revolutionise coding industry, leading to sky-high valuations
Two years after the launch of ChatGPT, return on investment in generative AI has been elusive, but one area stands out: software development. So-called code generation or 'code-gen' startups are commanding sky-high valuations as corporate boardrooms look to use AI to aid, and sometimes to replace, expensive human software engineers. Cursor, a code generation startup based in San Francisco that can suggest and complete lines of code and write whole sections of code autonomously, raised $900 million at a $10 billion valuation in May from a who's who list of tech investors, including Thrive Capital, Andreessen Horowitz and Accel. Windsurf, a Mountain View-based startup behind the popular AI coding tool Codeium, attracted the attention of ChatGPT maker OpenAI, which is now in talks to acquire the company for $3 billion, sources familiar with the matter told Reuters. Its tool is known for translating plain English commands into code, sometimes called 'vibe coding,' which allows people with no knowledge of computer languages to write software. OpenAI and Windsurf declined to comment on the acquisition. 'AI has automated all the repetitive, tedious work,' said Scott Wu, CEO of code gen startup Cognition. 'The software engineer's role has already changed dramatically. It's not about memorizing esoteric syntax anymore.' Founders of code-gen startups and their investors believe they are in a land grab situation, with a shrinking window to gain a critical mass of users and establish their AI coding tool as the industry standard. But because most are built on AI foundation models developed elsewhere, such as OpenAI, Anthropic, or DeepSeek, their costs per query are also growing, and none are yet profitable. They're also at risk of being disrupted by Google, Microsoft and OpenAI, which all announced new code-gen products in May, and Anthropic is also working on one as well, two sources familiar with the matter told Reuters. The rapid growth of these startups is coming despite competing on big tech's home turf. Microsoft's GitHub Copilot, launched in 2021 and considered code-gen's dominant player, grew to over $500 million in revenue last year, according to a source familiar with the matter. Microsoft declined to comment on GitHub Copilot's revenue. On Microsoft's earnings call in April, the company said the product has over 15 million users. As AI revolutionises the industry, many jobs and particularly entry-level coding positions that are more basic and involve repetition, may be eliminated. Signalfire, a VC firm that tracks tech hiring, found that new hires with less than a year of experience fell 24% in 2024, a drop it attributes to tasks once assigned to entry-level software engineers are now being fulfilled in part with AI. Google's CEO also said in April that 'well over 30%' of Google's code is now AI-generated, and Amazon CEO Andy Jassy said last year the company had saved 'the equivalent of 4,500 developer-years' by using AI. Google and Amazon declined to comment. In May, Microsoft CEO Satya Nadella said at a conference that approximately 20 to 30% of their code is now AI-generated. The same month, the company announced layoffs of 6,000 workers globally, with over 40% of those being software developers in Microsoft's home state, Washington. 'We're focused on creating AI that empowers developers to be more productive, creative, and save time,' a Microsoft spokesperson said. 'This means some roles will change with the revolution of AI, but human intelligence remains at the center of the software development life cycle.' Some 'vibe-coding' platforms already boast substantial annualised revenues. Cursor, with just 60 employees, went from zero to $100 million in recurring revenue by January 2025, less than two years since its launch. Windsurf, founded in 2021, launched its code generation product in November 2024 and is already bringing in $50 million in annualised revenue, according to a source familiar with the company. But both startups operate with negative gross margins, meaning they spend more than they make, according to four investor sources familiar with their operations. 'The prices people are paying for coding assistants are going to get more expensive,' Quinn Slack, CEO at coding startup Sourcegraph, told Reuters. Both Cursor and Windsurf are led by recent MIT graduates in their twenties, and exemplify the gold rush era of the AI startup scene. 'I haven't seen people working this hard since the first Internet boom,' said Martin Casado, a general partner at Andreessen Horowitz, an investor in Anysphere, the company behind Cursor. What's less clear is whether the dozen or so code-gen companies will be able to hang on to their customers as big tech moves in. 'In many cases, it's less about who's got the best technology; it's about who is going to make the best use of that technology, and who's going to be able to sell their products better than others,' said Scott Raney, managing director at Redpoint Ventures, whose firm invested in Sourcegraph and Poolside, a software development startup that's building its own AI foundation model. Most of the AI coding startups currently rely on the Claude AI model from Anthropic, which crossed $3 billion in annualised revenue in May in part due to fees paid by code-gen companies. But some startups are attempting to build their own models. In May, Windsurf announced its first in-house AI models that are optimised for software engineering in a bid to control the user experience. Cursor has also hired a team of researchers to pre-train its own large frontier-level models, which could enable the company to not have to pay foundation model companies so much money, according to two sources familiar with the matter. Startups looking to train their own AI coding models face an uphill battle as it could easily cost millions to buy or rent the computing capacity needed to train a large language model. Replit earlier dropped plans to train its own model. Poolside, which has raised more than $600 million to make a coding-specific model, has announced a partnership with Amazon Web Services and is testing with customers, but hasn't made any product generally available yet. Another code gen startup Magic Dev, which raised nearly $500 million since 2023, told investors a frontier-level coding model was coming in summer 2024 but hasn't yet launched a product. Poolside declined to comment. Magic Dev did not respond to a request for comment.
Time of India
an hour ago
- Time of India
Trump's 50% tariff on steel and aluminium begins as global trade tensions escalate
AP photo United States has raised tariffs on imported steel and aluminium to 50% beginning Wednesday, according to a White House order signed by president Donald Trump. The decision, framed as a measure to protect domestic industries from foreign 'dumping,' doubles the previous 25% levy imposed on these metals. According to the order, "Increasing the previously imposed tariffs will provide greater support to these industries and reduce or eliminate the national security threat posed by imports of steel and aluminum articles and their derivative articles." President Trump revealed the decision during a visit to a US steel plant in Pennsylvania last week. 'At 25 percent, they can sort of get over that fence. At 50 percent, they can no longer get over the fence,' he told workers. 'Nobody is going to be able to steal your industry,' he added, vowing stronger protection for American manufacturing. What Trump's 50% Tariffs Mean for the Steel Industry While tariffs on UK imports will remain at 25%, as both countries continue trade talks under an earlier agreement, the hike targets other partners. The European Union has already warned of potential retaliation, saying the move undermines ongoing negotiations. Mexico, a major trading partner, plans to seek an exemption. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với mức chênh lệch giá thấp nhất IC Markets Đăng ký Undo Its economy minister Marcelo Ebrard argued the new tariffs are unfair, especially since the US exports more steel to Mexico than it imports. 'It makes no sense,' he said. The latest tariff increase adds pressure to trade talks underway since April, when Trump reimposed 10% tariffs across multiple sectors. With the temporary pause on those hikes expiring in early July, diplomats now face a tightening window to reach workable solutions. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
3 hours ago
- Time of India
9 jobs that are future-proof in the age of Artificial Intelligence
Artificial Intelligence is transforming the workforce, automating routine tasks, and reshaping the skills needed for the future. As machines take over more predictable and repetitive work, it's natural to wonder: which careers are safe? The truth is, many jobs remain resilient—especially those requiring emotional intelligence, complex reasoning, creativity, and strategic thinking. Tired of too many ads? go ad free now The rise of AI doesn't mean the fall of human careers—it means a shift in what's valued in the workforce. Jobs that emphasise creativity, empathy, leadership, adaptability, and innovation are not only safe, but essential. Whether you're just starting out or considering a pivot, investing in future-proof skills and industries can help you stay ahead of the curve in an AI-driven world. Here's a closer look at nine careers that are expected to thrive in the age of AI. Healthcare Professionals Despite advances in AI diagnostics and robotic surgery, healthcare remains deeply human. Doctors, nurses, physical therapists, and mental health counsellors provide care that involves empathy, ethical judgment, and trust—qualities no machine can replicate. From interpreting patient symptoms in real time to offering emotional support during recovery, healthcare professionals bring a level of nuance and interpersonal skill that keeps this field safe from automation. As populations age and healthcare needs rise globally, the demand for skilled medical workers is only expected to grow. Cybersecurity Experts As more organisations move to digital platforms, the risk of cyberattacks grows exponentially. With AI being used to automate sophisticated hacks, cybersecurity experts become even more essential. Professionals in this field must constantly anticipate, identify, and neutralise evolving threats. Tired of too many ads? go ad free now The work is dynamic and requires not just technical knowledge, but strategic thinking and adaptability—skills AI has yet to master. From ethical hackers to information security analysts, cybersecurity is expected to be one of the fastest-growing tech fields in the coming decade. Creative Professionals Writers, designers, filmmakers, UX designers, and other creative professionals are often considered immune to full automation. While AI tools can generate images, texts, and music, they do so based on patterns—not original thought. True creativity involves intuition, context, emotion, and cultural understanding. Whether it's crafting a compelling story, designing a powerful brand identity, or developing an engaging user experience, these tasks require a distinctly human perspective. As businesses continue to seek authentic and meaningful connections with audiences, creative thinkers will remain invaluable. Teachers and Educators AI may offer personalised learning and administrative support in the classroom, but it cannot replace the role of a skilled educator. Teaching requires adaptability, mentorship, emotional intelligence, and the ability to inspire learners. Especially in early childhood and special education, human interaction is key to development. Furthermore, as the job market evolves, adult education and lifelong learning are becoming more important, creating opportunities for educators to teach new skills to new generations of workers. Mental Health Professionals The mental health crisis has been growing globally, and while AI can assist with basic therapy simulations or symptom tracking, it cannot provide the empathy, understanding, and relationship-building that effective mental health care requires. Therapists, psychologists, counsellors, and social workers are irreplaceable in addressing trauma, emotional complexity, and personal growth. As societal awareness and acceptance of mental health needs continue to rise, so too will the demand for compassionate, trained professionals in this field. Skilled Tradespeople Electricians, plumbers, mechanics, and other tradespeople perform hands-on work that is both complex and variable. While some tools may become 'smart,' the physical skill, problem-solving ability, and situational judgment involved in these jobs make them difficult to fully automate. Moreover, infrastructure maintenance and repair are essential services in every society—no matter how technologically advanced. As the world continues to urbanise and modernise, skilled trades remain both relevant and respected. Human Resources and Organisational Leaders Hiring, conflict resolution, cultural development, and strategic leadership involve deeply human elements. While AI can streamline HR tasks like resume filtering or scheduling, people still want to work with other people—especially when it comes to organisational culture, motivation, and ethics. Leaders who can align business goals with human values and manage diverse teams will be vital in the age of automation. In fact, as technology reshapes how we work, strong human leadership may be more important than ever. Legal Professionals Lawyers, judges, and legal consultants perform work that goes beyond document review and contract generation. While AI can assist with legal research, real-world cases often involve moral judgment, persuasion, negotiation, and a deep understanding of human behaviour. In areas like criminal law, immigration, and family law, the stakes are personal, emotional, and high. Legal professionals who focus on advocacy and nuanced reasoning are unlikely to be replaced by machines. Environmental and Sustainability Experts As climate change becomes one of the defining issues of the century, careers focused on sustainability are growing rapidly. Environmental scientists, renewable energy engineers, urban planners, and policy analysts are working on complex, interdisciplinary problems that require systems thinking and a long-term vision. While AI can aid in modelling and data analysis, addressing global environmental challenges still requires human-led decision-making, ethics, and collaboration across political and cultural boundaries.
