Fears that AI will eliminate entry-level jobs are unfounded due to Jevon's paradox. Just as Excel didn't kill accounting jobs but instead enabled more complex financial analysis, AI will augment the work of junior employees, increasing the sophistication and volume of their output rather than replacing them.

New firm-level data shows that companies adopting AI are not laying off staff, but are significantly slowing junior-level hiring. The impact is most pronounced for graduates from good-but-not-elite universities, as AI automates the mid-level cognitive tasks these entry roles typically handle.

A key concern is that AI will automate tasks done by entry-level workers, reducing hiring for these roles. This poses a long-term strategic risk for companies, as they may fail to develop a pipeline of future managers who learn foundational skills early in their careers.

While AI-native, new graduates often lack the business experience and strategic context to effectively manage AI tools. Companies will instead prioritize senior leaders with high AI literacy who can achieve massive productivity gains, creating a challenging job market for recent graduates and a leaner organizational structure.

By replacing the foundational, detail-oriented work of junior analysts, AI prevents them from gaining the hands-on experience needed to build sophisticated mental models. This will lead to a future shortage of senior leaders with the deep judgment that only comes from being "in the weeds."

By replacing junior roles, AI eliminates the primary training ground for the next generation of experts. This creates a paradox: the very models that need expert data to improve are simultaneously destroying the mechanism that produces those experts, creating a future data bottleneck.

AI will make the production of investment memos and rote analysis functionally free. The role of an investment analyst will therefore evolve from creating this content to prompting, steering, and quality-assuring the output of AI agents. The job becomes about evaluation and verification, not initial generation.

Instead of immediate, widespread job cuts, the initial effect of AI on employment is a reduction in hiring for roles like entry-level software engineers. Companies realize AI tools boost existing staff productivity, thus slowing the need for new hires, which acts as a leading indicator of labor shifts.

AI will handle most routine tasks, reducing the number of average 'doers'. Those remaining will be either the absolute best in their craft or individuals leveraging AI for superhuman productivity. Everyone else must shift to 'director' roles, focusing on strategy, orchestration, and interpreting AI output.