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Why fresh graduates face bleak tech jobs prospects
Managers in tech firms are uneasy about hiring members of the Zoomer generation, popularly known as Gen Z, with 55 percent of employers saying that this group struggles with teamwork.
While the tech world has for years been synonymous with innovation and boundless growth, industry researchers are warning that the sector’s long-running obsession with hiring bright graduates straight out of college is on a collision course with new-age realities.
Among these include lesser funding rounds, the growing need for smaller teams, fewer new graduate programmes as well as the rise of more efficient technologies such as artificial intelligence.
In a new report unveiled by SignalFire, a venture firm that tracks data on hiring moves by tech firms, pundits submit that new graduates now account for just seven percent of the overall hires in big tech and six percent in tech startups.
Within this context, big tech represents the top 15 technology companies by market cap while startups are companies funded by the top 100 venture capital (VC) firms and that closed a seed through a series C round in the past four years.
SignalFire tracks over 650 million professionals and 80 million organisations worldwide in a scope it says gives it a front-row seat to the talent transformations reshaping the industry.
“Everyone took a hit in 2023, but while hiring bounced back in 2024 for mid- and senior-level roles, the cut keeps getting deeper for new graduates,” reads the report.
“As budgets tighten and AI capabilities increase, companies are reducing their investment in new grad opportunities.”
The report further explains that managers in tech firms are uneasy about hiring members of the Zoomer generation, popularly known as Gen Z, with 55 percent of employers saying that this group struggles with teamwork.
“55 percent of employers say Gen Z struggles with teamwork, and 37 percent of managers said they’d rather use AI than hire a Gen Z employee,” says the report.
“As demand for junior roles declines, even highly credentialed engineering graduates are struggling to break into tech, especially at the Big Tech companies.”
The researchers note that the share of new graduates landing roles at the world’s leading tech giants, including Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla, has shrunk by more than half since 2022.
But it is not just a hiring slowdown, it’s is a shift in expectations.
The researchers note that today’s tech employers aren’t looking for potential but rather for proof and that this has left new graduates in a catch-22 situation, in that they need experience to get the job, but they also need the job to gain experience.
“In a world of leaner teams and tighter budgets, there’s little room for investment in training. As the pipeline for new talent shrinks at breakneck speed, it’s creating fierce competition for the few entry-level roles that remain,” they write.
“The cruel irony? Companies are posting junior roles but filling them with senior individual contributors, a phenomenon known as the experience paradox.”
But as AI gets the most blame for wiping out junior roles post-2022, the bigger driver is said to be the end of the “free money madness” (in the form of capital fundraisers) driven by low interest rates witnessed between 2020 and 2022, alongside the over hiring and inflation that it led to.
Now with tighter budgets and shorter runways, companies are hiring leaner and later, with data showing that Series A tech startups are today 20 percent smaller than they were in 2020.
“This shift isn’t just about hiring less—it’s a hiring reset. As AI tools take over more routine, entry-level tasks, companies are prioritising roles that deliver high-leverage technical output,” says SignalFire.
“Big Tech is doubling down on machine learning and data engineering, while non-technical functions like recruiting, product, and sales keep shrinking, making it especially tough for Gen Z and early-career talent to break in.”
Earlier this year, a predictive Future of Job report authored by the World Economic Forum (WEF) singled out a number of tech-backed roles poised to drive the fastest jobs growth in percentage terms this year, among them Big Data specialists, Fintech Engineers, AI and Machine Learning specialists as well as Software and Application Developers.
WEF noted at the time that although more generalized adoption of AI applications remains comparatively low with only a fraction of firms using it in yesteryears, adoption is growing, albeit unevenly across sectors.
