Goldman Sachs economist warns that “AI will replace Gen Z tech workers at first”

A senior economist at Goldman Sachs has issued a stark warning that Generation Z tech workers may be the first to face job displacement as artificial intelligence rapidly automates entry-level tasks. Joseph Briggs stated that while the overall labor market impact of AI is still in its early stages, the effects are already visible in the tech sector, which has seen a significant hiring pullback.

This warning comes amid a troubling trend for young professionals. According to data cited by Briggs, the unemployment rate for tech workers aged 20 to 30 has risen by approximately 3 percentage points since the start of 2025. This increase is sharper than that of older workers or younger professionals in other fields, highlighting a unique vulnerability for Gen Z in the tech industry. The rise of generative AI, such as OpenAI’s ChatGPT and similar models, is a primary driver behind this shift. These tools are becoming increasingly adept at handling routine tasks like basic coding, data entry, and content generation, which have historically been stepping stones for new graduates.

Major tech companies like Microsoft and Salesforce have reported that AI is now responsible for a significant portion of work on some projects, reducing the need for junior employees. This is creating a “low-hiring, low-firing” environment, where companies are cautious about expanding their headcount. Job postings for entry-level tech roles in the US have dropped by as much as 35% since 2023, making it harder for recent graduates to enter the workforce.

While AI is a major factor, some economists argue that the situation is more complex. Brad DeLong, a prominent economic historian, suggests that weak productivity growth and broader economic uncertainty are also contributing to the hiring slowdown. However, Briggs maintains that even if AI isn’t the sole cause, its disruptive force is undeniable and is disproportionately affecting younger workers. This has led nearly half of Gen Z job seekers to believe that AI has devalued their college degrees.

For Gen Z, this means that traditional education and technical skills alone may no longer be enough. The future-proof skills will be those that AI can’t easily replicate, such as adaptability, emotional intelligence, critical thinking, and complex problem-solving. This is prompting many young professionals to seek out alternative pathways like certifications, bootcamps, and entrepreneurial ventures to stay relevant in a rapidly evolving job market.