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AI takes the desk: HSBC sees automation threatening entry level jobs

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AI TAKES THE DESK: HSBC SEES AUTOMATION THREATENING ENTRY LEVEL JOBS

Artificial intelligence's meteoric rise is beginning to reshape job markets, with its impact increasingly visible among graduates and junior staff recruitments that have dwindled more recently, HSBC strategists said.

As firms ramp up their AI investments, the technology is set to cross new frontiers and bring costs down, widening the scope of jobs that could be easily replaced, HSBC said in a note dated October 14.

HSBC said data from recruitment site Indeed's mid-year 2025 labour market report for the UK showed how jobs for graduate are becoming increasingly scarce, with the share of jobs listed for them at the lowest level since 2018.

While labour market weakness cannot entirely be attributed to the rise of AI usage, it adds to a an existing weakness.

This holds true especially for the United States where the noise surrounding President Donald Trump's tariffs is drawing attention away from the steady weakness building in the labour market for recent graduates and younger workers, HSBC strategists said.

"This is both a supply- and demand-side story – and the impact of AI already appears to be explaining at least some of the latter," said James Pomeroy, a global economist at HSBC.

As central banks worldwide increasingly rely on labour market data to gauge economic health, the rise of AI in the coming years could further strain an already fragile job market.

Pomeroy said, although it's difficult to make a clear demarcation between the macro headwinds from the AI impact, the growing sophistication of AI tools appears to be adversely affecting certain pockets of the labour market.

"We may not be too far away from a one-person 'unicorn' company – with AI allowing a single worker to scale to a previously impossible size."

(Kanchana Chakravarty)

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