AI is Already Influencing the Job Market, Particularly Among Young Tech Professionals, According to Goldman Economist

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A screen displays the company logo for Goldman Sachs on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 7, 2025. Brendan McDermid | Reuters. Changes to the American labor market brought on by the arrival of generative AI are already showing up in employment data, according to a Goldman Sachs economist.

Most companies have yet to deploy artificial intelligence in production cases, meaning that the overall job market hasn't yet been significantly impacted by AI, said Joseph Briggs, senior global economist of Goldman's research division, in a podcast episode. However, there are already signs of a hiring pullback in the technology sector, particularly affecting younger employees.

"If you look at the tech sector's employment trends, they've been basically growing as a share of overall employment in a remarkably linear manner for the last 20 years," Briggs mentioned in the episode of "Goldman Sachs Exchanges" scheduled for Tuesday. "Over the last three years, we've actually seen a pullback in tech hiring that has led it to undershoot its trend."

Since its November 2022 release, OpenAI's ChatGPT has significantly influenced the rise of Nvidia, the world's most valuable company, and prompted entire industries to consider its implications. Generative AI models are quickly becoming proficient in handling many routine tasks, with some experts suggesting they are already comparable to human software engineers. This has raised concerns that, while automation may enhance productivity and benefit shareholders, significant portions of the job market could be affected in the coming years.

Technology executives have recently been more transparent regarding the impact of AI on employees. Companies including Alphabet and Microsoft have noted that AI is generating approximately 30% of the code on some projects, while Salesforce CEO Marc Benioff stated in June that AI manages up to 50% of the work at his company. 

Young tech workers, whose roles are more susceptible to automation, are among the first to experience this displacement, as highlighted by Briggs. Unemployment rates among tech workers aged 20 to 30 have risen by 3 percentage points since the beginning of this year. Briggs recently co-authored a report titled "Quantifying the Risks of AI-Related Job Displacement," which uses data from IPUMS and Goldman Sachs Global Investment Research. "This is a much larger increase than we've seen in the tech sector more broadly and larger than for other young workers," he stated.

Tech CEOs are taking a cautious approach by delaying the hiring of junior employees as they integrate AI into their operations, remarked George Lee, the former technology banker who co-heads the Goldman Sachs Global Institute. "How do I begin to streamline my enterprise so I can be more flexible and adaptive... yet without harming our competitive edge?" Lee reflected in the podcast episode. "Young employees during this period are somewhat the casualty of that."

Over time, it is estimated that around 6% to 7% of all workers could face job loss due to automation from AI in a baseline scenario, according to Briggs. The transition could be more challenging for both workers and the U.S. economy if companies adopt these technologies at a faster pace than the decade-long timeline he assumes. This acceleration could stem from technological advancements or an economic downturn prompting cost-cutting measures.

If researchers achieve AGI, or artificial general intelligence, which equals a person's ability to learn and adapt across various domains, the impact on the workforce would be even more profound, according to the Goldman economist. "Our analysis doesn't factor in the potential for the emergence of AGI," Briggs noted. "It's difficult to even begin contemplating the labor market implications, but I would assume there is likely more room for labor substitution and a more disruptive outcome in that scenario."

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