ServiceNow CEO Bill McDermott’s warning to graduates: AI could push unemployment to ‘mid-30s’

ServiceNow CEO Bill McDermott has warned that the rapid adoption of AI could create major challenges for entry-level workers in the coming years. Speaking in an interview with CNBC’s “Squawk on the Street,” McDermott said AI-driven automation may reduce the number of jobs available to recent graduates as companies rely more on software agents to complete tasks. Bill McDermott said unemployment among 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,” he added.Bill McDermott said ServiceNow’s AI software is designed to help companies automate many tasks that previously required human workers. According to him, the company’s tools have already replaced many functions in customer service operations. McDermott said that the software firm has already taken out 90% of the use cases that previously relied on humans in customer service.He added that the technology allows companies to grow revenue and free cash flow without increasing employee numbers. “I do think it’s coming quicker than people anticipate,” he said. Last month, Block Inc. said it plans to cut nearly half of its workforce as more work becomes automated. Earlier this week, software company Atlassian announced job cuts affecting about 10% of its employees while increasing investments in AI. Industry analysts say AI tools are beginning to affect many white-collar jobs, including roles in software development and marketing, allowing companies to increase productivity while hiring fewer workers.Leaders at other companies have also discussed using AI to change workforce structures. Alex Karp previously said he wants to increase revenue significantly while reducing headcount, while Andy Jassy said the company expects its corporate workforce to shrink as AI tools become more widely used.