Workday executives warn that artificial intelligence could disrupt entry-level careers while new Federal Reserve and PwC findings show a changing workforce, growing demand for AI skills and the need for faster employee training.
Artificial intelligence is changing how companies hire, train and manage employees, raising concerns about the future of entry-level jobs while creating demand for new skills. At the Workday Rising conference in October 2026, company executives warned that businesses must invest in retraining workers as AI takes over tasks once performed by people.
The discussion comes as new economic research shows that some employers are already slowing recruitment because of improvements in AI productivity. However, evidence of widespread job losses remains mixed, with other studies showing that companies adopting AI are expanding their workforces.
Business leaders increasingly face a difficult decision: use AI primarily to reduce operating costs or invest in employees who can work alongside the technology.
Workday CEO Raises Concerns About Entry-Level Jobs
Aneel Bhusri, co-founder and chief executive of Workday, expressed concern about recent college graduates entering a workforce where AI can perform many traditional beginner-level responsibilities.
Speaking at Workday Rising, Bhusri acknowledged that businesses may reduce hiring as they discover how much work AI systems can complete.
Many entry-level positions provide the practical experience that helps employees advance into more demanding roles. If companies automate those positions without creating alternative pathways, graduates could struggle to gain the experience required for career advancement.
According to technology publication diginomica, Bhusri warned that rising unemployment among college graduates could become a serious problem in the United States and Europe.
He argued that businesses, educational institutions and governments share responsibility for preparing younger workers for an AI-driven economy.
Gerrit Kazmaier, Workday’s president of product and technology, identified another challenge. Many industries already face shortages of qualified workers despite concerns about technology replacing jobs.
Healthcare provides a prominent example.
Kazmaier explained that hospitals and other healthcare providers often struggle because they cannot recruit enough qualified professionals to meet patient demand.
AI could help existing employees become more productive, but it cannot automatically eliminate shortages of workers requiring specialized training and professional qualifications.
The challenge is finding ways to connect displaced workers with expanding opportunities while ensuring they have the necessary skills.
Education Struggles to Keep Pace With AI
Kazmaier warned that educational institutions are preparing many graduates for jobs that are already changing.
Students may spend years learning established workplace procedures, only to discover that employers now expect familiarity with AI tools and automated systems.
This creates a mismatch between traditional education and the practical skills businesses increasingly require.
Kazmaier said demand for AI specialists is growing across engineering, marketing and sales. However, companies frequently struggle to find applicants who can immediately perform these roles.
He believes investment in education and reskilling is essential to helping workers remain employable.
Reskilling involves teaching employees new capabilities so they can move into different roles. Upskilling focuses on improving existing abilities so workers can perform their current jobs more effectively.
Both approaches are becoming important as employers introduce AI into daily operations.
Workday has developed products intended to help organizations identify employee skills, understand workplace tasks and determine where automation could improve productivity.
Its Work Intelligence technology examines how work is performed and helps organizations identify tasks that can be supported by AI.
Kazmaier argued that greater efficiency does not necessarily require businesses to reduce their existing workforce.
Companies could instead use the technology to expand operations without hiring additional employees at the same pace as before.
However, this approach also presents a challenge for job seekers. Businesses that increase output without expanding staff may provide fewer opportunities for graduates and other people entering the workforce.
AI Training Program Shows Potential for Rapid Reskilling
Joel Hellermark, Workday’s chief AI officer, highlighted an example of technology-assisted retraining during the COVID-19 pandemic.
Hellermark previously led Sana, an AI learning technology company later acquired by Workday.
He said Sana participated in an effort to retrain airline employees for work supporting hospitals when the pandemic disrupted the travel industry.
According to Hellermark, the program helped reskill approximately 200,000 people using personalized learning and AI-supported training.
He explained that traditional retraining programs could have taken about a year, while technology made it possible to deliver targeted instruction more quickly.
The figure was presented by Hellermark during the conference and should be understood as the company’s account of the initiative rather than an independently verified employment outcome.
The example illustrates how adaptive learning systems could help workers transition between industries experiencing sharply different employment conditions.
Hellermark warned that technological changes previously spread across workplaces over many years. AI adoption may now require employees to acquire new capabilities much more frequently.
Workday has also supported workforce training initiatives in the United States and Europe, including programs intended to improve access to digital skills.
Federal Reserve Reports Reduced Hiring at Some Companies
New findings from the Federal Reserve suggest that AI is beginning to influence employment decisions, although the effects differ considerably between industries.
The Federal Reserve’s October 14 Beige Book reported that overall employment levels changed little across much of the United States.
However, five of the central bank’s 12 regional districts reported that some companies had reduced staffing through employee departures, delayed recruitment or expected slower job creation after investing in AI.
Businesses were using automated systems to improve productivity, sometimes allowing them to maintain operations with fewer additional employees.
The report did not establish that AI was responsible for a nationwide decline in employment.
Instead, it described a labor market where many employers were reluctant to hire aggressively, even while avoiding large-scale layoffs.
The Federal Reserve Bank of New York reported that some larger companies were eliminating selected positions or postponing recruitment as they integrated AI into business operations.
Meanwhile, the Cleveland district reported that some banks had reduced staffing requirements through automation.
These findings suggest that AI’s early employment effects may be more visible in reduced hiring than in large public announcements of job cuts.
For younger workers, fewer available positions can still create difficulties even when overall employment remains relatively stable.
Research Shows Both Job Risks and Opportunities
Studies examining AI and employment have produced different findings, partly because researchers measure different industries, time periods and types of work.
An April 2026 working paper published by the U.S. Census Bureau found that employment among workers aged 22 to 24 declined in industries most exposed to AI after the introduction of ChatGPT.
The study reported a 12% decline in employment for early-career workers in the most AI-exposed group over 10 quarters.
Its findings suggest that reduced hiring can gradually affect employment even without widespread layoffs.
However, other research indicates that companies making extensive use of AI may continue expanding.
PwC’s 2026 Global AI Jobs Barometer examined more than one billion job advertisements across six continents.
The report found that employment at companies in the most AI-exposed sectors had grown 52% relative to 2018 levels, compared with 36% at businesses in the least exposed sectors.
PwC also reported that job advertisements requiring AI skills were growing substantially faster than the wider employment market.
These findings do not establish that AI directly caused the employment gains. They indicate that the relationship between automation and job growth is more complicated than a simple replacement of workers by machines.
Employees With AI Skills Receive Higher Pay
One of PwC’s most significant findings concerns the financial value of AI knowledge.
Its research found that jobs requiring AI skills offered an average wage premium of 62% compared with similar positions that did not require those capabilities.
The figure reflects differences between comparable job advertisements rather than suggesting that every employee using AI automatically earns 62% more.
The report also found that AI-exposed entry-level positions increasingly demand skills traditionally associated with more experienced workers.
These include judgment, leadership and the ability to evaluate complex information.
For graduates, this creates an additional challenge. Employers may expect advanced decision-making abilities from candidates who have had limited opportunities to develop them through practical experience.
Workers who lack access to AI tools or formal training could find themselves at a disadvantage.
Employers therefore face pressure to provide structured learning opportunities rather than expecting employees to develop new skills entirely on their own.
Workday Addresses Its Own Job Cuts
The debate over AI and employment also includes questions about decisions made by technology companies themselves.
At Workday Rising, Bhusri addressed approximately 900 job cuts announced by the company during 2026.
He said those reductions were not directly caused by AI replacing employees.
Instead, Bhusri attributed the restructuring to an overly complicated management structure that slowed product development and decision-making.
The company wanted to reduce organizational layers and give employees working directly on products greater responsibility.
His explanation demonstrates an important distinction between layoffs caused by automation and workforce reductions resulting from broader corporate restructuring.
It also shows why determining AI’s precise effect on employment can be difficult when businesses are simultaneously reorganizing operations, reducing expenses and introducing new technology.
For companies, the central question is increasingly how to combine AI capabilities with human experience.
Workday executives argue that the most effective organizations will continue investing in talented employees while using automation to support their work.
Research from the Federal Reserve, Census Bureau and PwC indicates that this transition is already changing hiring patterns and required skills, even though its long-term employment effects remain uncertain.
The immediate challenge is ensuring that workers, particularly recent graduates and employees in vulnerable occupations, have meaningful opportunities to develop the skills needed in workplaces increasingly shaped by artificial intelligence.
IMAGE: Another Workday Begins, south of Hedon, East Riding of Yorkshire, England.The morning commuters head westwards along the A1033 from the south Holderness area towards Hull with the early morning sun peeping over the horizon.. Photo: Andy Beecroft / Wikimedia, taken 2008-11-19, CC BY-SA 2.0