US companies resume hiring as AI fears ease, claims at 55-year low

Major US companies from Alphabet to CSX are hiring again after months of holding back, realizing artificial intelligence cannot replace the humans needed to work alongside it.

"Just because you have coding agents doesn't mean you're not hiring engineers," said Sarah Franklin, chief executive officer of human-resources platform Lattice. "What you have now is a realization that you need the AI-native skills. You need this workforce, which is innovative, not calcified in thought."

Booz Allen Hamilton plans to accelerate hiring after cutting thousands of jobs last year as the Trump administration slashed federal contracts. Total head count stood at roughly 30,900 as of June 30, down 7.5% from a year earlier, but the government contractor now sees healthy demand for its services, including in national security for workers who need security clearances. "We actually need to accelerate hiring a bit. We're a little bit behind right now," Chief Operating Officer Kristine Martin Anderson told investors.

CSX said its train and engine service head count will increase modestly in the coming months to help meet higher demand, even as it looks to technology to make up for attrition elsewhere. Alphabet Chief Financial Officer Anat Ashkenazi said the technology company expects to continue hiring in key investment areas such as AI and cloud computing. Tool maker Snap-on also plans to add employees to expand its business, while ServiceNow wants to hire more sales executives to capture growth in cybersecurity.

The pickup in hiring reflects a broader recalibration among employers about what AI can do. For much of the past 18 months, big employers were convinced fewer workers meant faster growth, and US public companies shrank their white-collar workforces. Now layoffs are shrinking. The most recent week of US jobless claims was the lowest on record since 1969, according to federal data.

The apprenticeship ladder at risk

Andrew McAfee, a research scientist at MIT and co-lead of the university's Initiative on the Digital Economy, warned that companies replacing entry-level workers with AI risk creating long-term workforce challenges. "How else are people going to learn to do the job except via on-the-job learning and training apprenticeship?" McAfee said. "When we put too much automation in too quickly, we lose that apprenticeship ladder."

The concern is acute for recent graduates. Entry-level job postings on Handshake are down 2% year over year and remain 12% below pre-pandemic levels, according to the platform's Class of 2026 Network Trends report. The unemployment rate for college graduates aged 22 to 27 stands at 5.6%, per the Federal Reserve Bank of New York. A Monster survey found that 89% of graduates from the Class of 2026 are concerned that AI or automation could replace entry-level jobs, up from 64% in 2025.

Yet some evidence suggests younger workers may adapt. A Goldman Sachs analysis found that college-educated young workers generally experience earnings losses around half as large as other displaced workers over the decade following job loss and are more likely to move into occupations that complement emerging technologies. "Contrary to current concerns that the costs of AI will fall especially hard on new graduates, younger workers have actually been able to adjust more flexibly through occupational mobility and skill upgrading in the past," the report said.

Hiring demand improves but uncertainty lingers

M. Keith Waddell, chief executive officer of staffing firm Robert Half, said AI's impacts on the job market are proving "more benign than some have feared." The firm, which places workers in roles from technology to financial services, is seeing clients recruit again. "Hiring demand continues to improve and market conditions are increasingly more supportive of our business," he said.

Still, some caution that much remains unclear as AI's potential continues to evolve. Paul Osterman, a professor emeritus at MIT and author of "Disposable Workers," said many companies treated employees as dispensable, cutting them when convenient or downgrading them into contractor or part-time roles. "AI introduces so much uncertainty with employers, not sure knowing what they need or don't need," he said. "Who's going to be the victim of all that noise?"

The shift in corporate hiring sentiment, if sustained, could preserve the pathway through which employees develop skills for more complex roles over time. According to a Deloitte study published in November 2025, 76% of Gen Z respondents reported using a standalone AI tool, the highest share among all generations — a cohort that companies cutting entry-level hiring risk losing entirely.

This article is for informational purposes only and does not constitute investment advice.