ServiceNow CEO Bill McDermott told CNBC on Friday that artificial intelligence agents could drive unemployment among recent college graduates “into the mid-30s” within the next couple of years. The warning came during an appearance on “Squawk on the Street,” where McDermott described a corporate landscape increasingly built around AI agents rather than human workers in entry-level roles.
“So much of the work is going to be done by agents,” McDermott said. “So it’s going to be challenging for young people to differentiate themselves in the corporate environment.”
ServiceNow Has Already Replaced 90 Percent of Customer Service Roles With AI
McDermott pointed to ServiceNow’s own operations as evidence. The enterprise software company, which builds workflow automation tools used by thousands of large organizations, has already eliminated 90 percent of the customer service use cases that previously required human workers. He said CEOs across industries will likely forego hiring fresh talent in an effort to improve their balance sheets for shareholders.
ServiceNow, valued at roughly $200 billion, sells the platforms that other companies use to automate internal workflows. When its CEO says AI agents are replacing human roles at that scale, it reflects what the company is seeing across its customer base, not just within its own walls.
The Numbers Behind the Warning
The Federal Reserve Bank of New York reported that unemployment among recent college graduates stood at about 5.7 percent at the end of 2025. The underemployment rate for that group hit 42.5 percent, the highest level since 2020. A jump to the mid-30s in outright unemployment would represent a sixfold increase from current levels and a labor market disruption far beyond what even the worst years of tech layoffs have produced.
Employers are already pulling back from entry-level hiring. A growing number of job postings labeled “entry level” now require three or more years of experience, effectively shutting out new graduates. Oxford Economics flagged signs in 2025 that entry-level positions were being displaced by AI at higher rates than other job categories.
Block’s Layoffs Set the Template
McDermott’s comments follow a pattern that accelerated in February when Block, the fintech company led by Jack Dorsey, laid off more than 4,000 employees, cutting its workforce nearly in half. Block’s CFO said the reductions would enable the company “to move faster with smaller, highly talented teams using AI to automate more work.”
Dorsey went further, predicting that “within the next year, the majority of companies will reach the same conclusion and make similar structural changes.” The company’s stock surged as much as 24 percent on the news, signaling that Wall Street is rewarding companies that replace headcount with AI infrastructure.
What This Means for the Broader Startup Ecosystem
The trend is not limited to large corporations. In 2025, companies directly cited AI in announcing 55,000 job cuts globally, more than 12 times the number attributed to artificial intelligence just two years earlier. Through early 2026, more than 45,000 additional tech jobs have been eliminated, with roughly 68 percent of those cuts happening in the United States, according to tracking by CNBC.
For startup founders, the math is shifting. AI tools now allow solo operators and lean teams to handle work that once required multiple full-time hires. That creates opportunity for founders who can build with smaller teams, but it also narrows the pipeline of experienced workers available for roles that still require human judgment.
McDermott did not frame AI’s impact as a distant possibility. “It’s coming quicker than people anticipate,” he said.
