AI Could Push Graduate Unemployment to 30%

NOW CEO Bill McDermott warned on CNBC's "Squawk on the Street" on March 13 that AI-driven automation could push graduate unemployment rates into "the mid-30s" within the next couple of years. McDermott pointed to ServiceNow's own operations as evidence, noting that the company has already eliminated 90% of human customer service use cases with AI agents. "So much of the work is going to be done by agents," he said, adding that "it's going to be challenging for young people to differentiate themselves".

Current data from the New York Fed puts recent graduate unemployment at approximately 5.7% as of late 2025, with underemployment at 42.5% — the highest level since 2020. McDermott's projection represents a dramatic escalation from current levels and was notably specific for a sitting Fortune 500 CEO. The warning aligns with broader industry signals, including Meta's reported plans to cut 20% of its workforce as AI-enabled productivity gains reduce headcount needs.

The remarks carry implications for both the labor market and the companies driving AI adoption. While AI platform stocks could benefit from accelerated enterprise deployment, a sustained surge in youth unemployment could trigger regulatory backlash and constrain consumer spending power — ultimately affecting the very enterprises investing in AI automation.