Headhunters and career coaches often say that the best time of year to look for a new job is in January. But in 2026, the job market will be tight – and for new graduates, there’s growing competition from artificial intelligence.
The National Association of Colleges and Employers (NACE) Job Outlook survey projects hiring levels for new grads will increase just 1.6% in 2026 after remaining flat in 2025. In that same survey, 45% of employers rated the job market as “fair.”
NC State University economist Mike Walden (Photo: NC State University)UPS, Target, and Amazon are among the high-profile companies that announced plans to shed thousands of jobs in the 4th quarter.
And it’s unclear if those jobs will return any time soon.
“I think what you’re talking about there, with respect to some of these large companies making layoffs, it’s AI generated,” said North Carolina State University economist Mike Walden in an interview with NC Newsline.
“We are now seeing AI deployed more, at least planning to be deployed more, into a variety of enterprises,” Walden said.”I think they’re looking at their payroll, they’re looking at employment. And we’ve seen multi-thousands of employee cutback announcements already made.”
Walden believes this is going to be a challenge for prospective employees for the next couple of decades.
Careers that are projected to see major disruptions include: marketing and public relations, interpreters and translators, customer service representatives, and web developers.
At NC State’s James B. Hunt Jr. Library, a bookBot provides automated storage and retrieval of up to two million items. The robotic system can return a requested book within five minutes. Librarians are freed up to provide more personalized help. (Photo Clayton Henkel/NC Newsline)“It’s going to bring great productivity. It’s going to probably bring great abilities for a lot of companies to do things they couldn’t have done before. But it may come at a price in terms of less employment or different kinds of employment,” said Walden.
A report by outplacement and executive coaching firm Challenger, Gray & Christmas found U.S. employers announced more than 71,000 job cuts in November. While restructuring was the top reason given for shedding jobs, AI was cited for 6,280 jobs cut in November and more than 54,000 layoffs last year.
Walden says AI is notably different from any technology we’ve seen over the last hundred years.
“Usually when you think about new technologies, it’s been technologies that replace what I call brawn with a machine. AI is different because it’s replacing cognitive ability, not strength. And in the 21st century, that’s the basis of a lot of jobs,” Walden told NC Newsline.“People get trained in colleges to think, to analyze, to do analysis, to do programming, et cetera. And we’re going to see a lot of that change with a lot of those tasks shifted to AI.”
Improving employability in an AI world
The key to making a job more AI-resistant may lie in soft skills.
Sumana Northover, Northeastern University (Photo: Northeastern.edu)Sumana Northover, director of Employer Engagement and Career Design at Northeastern University, believes recent grads and job-seekers who can demonstrate competencies such as critical thinking, clear communication, leadership and teamwork will find it easier to make the transition from college to career.
“What’s interesting is that nationally, students rate themselves higher on these competencies than actual employers rate students,” said Northover during a recent webinar sponsored by The Hunt Institute.
Chelle Travis, executive director of SkillsUSA, agrees that students really need to work on those skills to better understand their strengths and weaknesses.
“I was on a panel not long ago where one of our industry partners said that they are often hiring for technical skills, but they’re firing for soft skills,” said Travis.
Travis said by normalizing work-based learning opportunities, students are more likely to have a leg up on any competition.
“Across this country, we should see students that are participating in internships, apprenticeships, mentorships or other programs that develop graduates with higher confidence, clarity, and employability,” she said.
Artificial intelligence shapes higher education
UNC System President Peter Hans has also spent a great deal of time thinking about how artificial intelligence will shape today’s students and tomorrow’s workforce.
“I worry that for every promise AI holds for teaching and learning, it poses an equal threat to motivation and mental effort,” Hans told members of the UNC Board of Governors at their September meeting. “It’s one thing to make use of an AI tool when you’ve already had years of experience honing your mind and your work ethic. But having access to a mental shortcut from your earliest days as a student — an easy button you can press any time things get tough — is a tempting invitation to mediocrity.”
UNC System President Peter Hans says a new Chief AI Officer will oversee AI strategy for the 17-campus system. (Photo: UNC/PBSNC video stream)Hans said a Chief AI Officer will oversee AI strategy for the 17-campus system. Earlier this month, UNC instructors were invited to help pilot new student AI literacy training modules created by a team of faculty, librarians, and instructional designers for use during the Spring 2026 semester.
“There are already indications that AI is eroding entry-level jobs in fields like computer programming, with more on the way. We have an obligation to deliver the most relevant, most valuable degree possible for our students, and that means closely monitoring the way emerging technology is changing our economy and our society,” said Hans.
That understanding is essential. A new NBC News poll finds nearly two-thirds of registered voters question whether getting a four-year college education was worth the cost given the large amount of debt many students incur. Only one-third agreed the cost was worth it to have a better chance of landing a good job and earning more over their lifetime.
Walden said some students are making that decision because they don’t know if the money and time they spend on a college degree is going to help them get a job in the future if AI is in the mix.
“And we really need to think about this fast, because if we need to retrain people who are laid off because of AI, we need to get those programs thought out and then implemented very quickly,” said Walden.
Leah Burton, SAS Institute (Photo: The Hunt Institute webinar)The private sector is also closely watching how AI defines the employment outlook. Leah Burton works as a principal industry consultant for higher education at SAS Institute. Burton said the Cary-based company is working with states to integrate education and workforce data to project the job needs of the future. Continually reviewing that data and not letting it sit on a shelf will help states better understand if their education pipeline is meeting industry demand.
“As these changes in the workplace happen, we need to find ways to evaluate, analyze, and make important decisions so that while some jobs are going to become obsolete, workers themselves don’t become obsolete,” said Burton.
For those worried AI may one day eliminate their job, Northover offered some sobering advice.
“Certain jobs are getting phased out,” she said. “But I think that’s an opportunity for us to look at how we’re doing things and how we can use AI to help us do it better. It’s freeing up capacity, brain power, whatever you want to call it, to be able to think and perform on a higher level. Lifelong learning is critical in maintaining relevance.”
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