AI Tsunami Could Hit Entry-Level Jobs First, IMF Chief Warns

Artificial intelligence is no longer a distant concept quietly developing in labs. It’s already reshaping the global economy—and it may be young workers who feel the shock first. At the World Economic Forum in Davos, IMF Managing Director Kristalina Georgieva issued a blunt warning: an “AI tsunami” is coming for the labour market. And for those just starting their careers, the timing could not be worse.

1- “Wake up”: IMF warns AI is arriving faster than expected

Georgieva’s message to governments, employers, and workers was direct: “Wake up, AI is for real.” Her concern is not that AI will merely change how people work—but that it could wipe out the stepping-stone roles that young workers traditionally rely on to build experience and climb the career ladder. In other words, if entry-level jobs disappear or shrink dramatically, the consequences could ripple through an entire generation’s earning power.

2- 60% of Jobs Affected — But Not Equally

The IMF’s own research suggests that up to 60% of jobs in advanced economies will be enhanced, transformed, or eliminated by AI over the next few years, with roughly 40% of jobs globally exposed to similar disruption.

While some workers may see productivity boosts and higher pay in AI-augmented roles, many entry-level positions — traditionally occupied by young workers — are at greatest risk. “Tasks that are eliminated are usually what entry-level jobs do,” Georgieva said, adding that young people searching for their first jobs will find it harder to get quality placements.

This imbalance could compound existing economic pressures on Generation Z and new labour market entrants, at a time when broader surveys show persistent anxiety among young workers about AI’s effects. A recent Randstad survey found 80% of workers believe AI will impact their jobs, with Gen Z expressing the most concern.

3- Middle Class Squeeze and Wage Stagnation

It is not just youth who could suffer. Georgieva warned that many jobs unchanged by AI risk wage stagnation because they lack associated productivity gains. “The middle class, inevitably, is going to be affected,” she said — a concern echoed by European Central Bank President Christine Lagarde, who highlighted widening inequality as a systemic risk.

4- Already Happening: Job Cuts and Structural Shifts

There are early signs of this shift. A report from Challenger, Gray & Christmas noted that AI was cited as a factor in nearly 55,000 U.S. job cuts last year, often in roles heavy with clerical tasks now vulnerable to automation. Beyond anecdotal reports, independent research offers mixed but concerning signs for young and lower-skilled workers. Data from ADP and other payroll analyses indicate that employment among 22- to 25-year-olds in AI-exposed sectors has declined in recent years, while older professionals show relative resilience.

Academics have also documented the polarising effects of AI: automation tends to reduce employment and wage growth in low-skill occupations while increasing opportunities and compensation for high-skill, complementary roles.

5- Policy, Regulation, and Reskilling: The Missing Guardrails

Despite the stark warnings, there’s fierce debate among economists and labour experts about the scale and pace of AI’s impact. Some research finds that AI adoption so far has not led to widespread net job loss, instead supporting firm growth and changing job structures. Other studies suggest AI exposure predicts unemployment risk for specific occupations when considering multifaceted labour dynamics.

But for many workers — particularly the young, less experienced, or with routine task profiles — the threat is tangible. “Where are the guardrails?” Georgieva asked in Davos, stressing that technology is moving faster than public policy or training systems can adapt.

6- Policy, Regulation, and Reskilling: The Missing Guardrails

Industry leaders struck different notes at Davos. Some — including executives from Nvidia and other tech firms — emphasised AI’s job-creating potential, pointing to infrastructure growth and emerging roles.

Others, like JPMorgan Chase CEO Jamie Dimon, urged gradual workforce changes with investment in worker reskilling, rather than sudden layoffs. Yet few dispute the central paradox: AI can create wealth but also widen inequalities if its gains accumulate among those with capital or high-value skills.

*Bottom line: Georgieva’s Davos message — that AI is not some far-off future but an active force reshaping jobs today — underscores urgent questions about labour markets, education and social safety nets. For young people entering the workforce, the challenge isn’t just competing with technology: it’s preparing for a world where the very nature of work is being rewritten.