The spread of AI agents could easily drive unemployment among recent college graduates into the mid-30% range within the next couple of years, ServiceNow CEO Bill McDermott said.
ServiceNow offers customers “a single platform that brings together any AI, any data, and any workflow” to transform how people work across their business,” allowing employees to “spend less time mired in busywork and more time doing what they were actually hired to do,” according to the company website.
McDermott told CNBC’s “Squawk on the Street” that “unemployment for new college graduates could easily go into the mid-30s in the next couple of years.”
“So much of the work is going to be done by agents. So it’s going to be challenging for young people to differentiate themselves in the corporate environment,” McDermott added.
The warning reflects a broader shift as companies across industries use new AI tools to slash costs, cut jobs, and slow hiring while boosting productivity. The Federal Reserve Bank of New York reported that the unemployment rate for recent college graduates was about 5.7% at the end of 2025, with the underemployment rate at 42.5% — the highest level since 2020.
Several tech executives have signaled similar plans. Amazon CEO Andy Jassy has said the company will shrink its corporate workforce with AI tools. Palantir CEO Alex Karp has said he wants to grow revenue 10-fold while reducing headcount, per CNBC.
Recent moves include payment firm Block announcing plans last month to cut nearly half its workforce as AI automates more tasks. Software company Atlassian, whose stock has dropped 54% this year amid AI disruption concerns, said this week it would lay off about 10% of employees to support AI investments.
Unlike previous technological shifts, AI is now targeting white-collar roles such as coding and marketing, allowing firms to do more with fewer workers.
McDermott said ServiceNow’s tools help businesses sharply reduce hiring costs. The company has already eliminated 90% of the customer service use cases that once relied on humans. The platform also lets firms maintain headcount while growing revenue and free cash flow.
“I do think it’s coming quicker than people anticipate,” he said.
A Senate report released last October warned that AI and automation could wipe out as many as 100 million jobs over the next ten years, including “89% of fast food and counter workers, 64% of accountants, and 47% of truck drivers,” The Dallas Express reported.
A report from Oxford Economics last month projected that one in five jobs is highly vulnerable to automation over the next 20 years. However, that does not necessarily mean the need for workers will decrease, according to Nico Palesch, the report’s author.
“Demand for work is not going to go away, because together with automation comes the need to maintain robots, design robots, to teach people how to use robots,” Palesch said.
