AI Is Cutting Jobs While AI-Exposed Pay Rises: The Entry-Level Ladder Is Shrinking

Artificial intelligence is creating a strange paradox across the US job market. Even as companies announce thousands of job cuts citing AI, roles closely tied to AI are enjoying a 46% jump in pay. Yet this boom comes with a potential hidden cost: while experienced specialists command higher salaries, the share of entry-level postings in highly AI-exposed occupations has fallen sharply.

Data from Indeed, recently shared on X by The Kobeissi Letter, reveals that advertised wages for roles heavily exposed to artificial intelligence have risen by about 46% since 2021. In comparison, roles with moderate exposure saw a 41% increase, overall posted wages grew by 39%, and positions with the lowest exposure saw a smaller increase of 25%.

This gap has grown much clearer over the past two years, widening steadily from 2024 through 2026. Setting the average pay in 2021 as a baseline of 100, the index surged to roughly 146 by 2026 for fields heavily impacted by artificial intelligence, standing at 141 for moderately AI-exposed roles and dropping to 125 for the least involved positions.

The Kobeissi Letter pointed out that this shift signals how fiercely firms are battling to hire talent equipped with artificial intelligence proficiencies, potentially reshaping compensation across the United States.

Why AI Skills Are Commanding a Premium

Published on 17 September, research from the Indeed Hiring Lab found that generative AI has the greatest potential to transform fields such as software development, IT systems and support, data and analytics, marketing, and banking and finance. Conversely, jobs facing minimal disruption span nursing, caregiving, food service, sanitation and manufacturing.

This discovery challenges the assumption that greater exposure to AI necessarily leads to lower advertised pay.

Even after factoring in shifts across various job types, Indeed discovered that positions impacted by artificial intelligence boast a 5.7% bump in advertised salaries following the launch of ChatGPT. When analysts tracked specific job titles against their historical earnings, that advantage stayed at 4.7%. Factoring in experience levels brings the margin down to 2.4%, although that final estimate was not statistically significant at the 5% level.

This financial edge is spread unevenly across career stages. Senior positions enjoy the largest cumulative wage boost, followed by mid-level tracks, leaving entry-level workers with a much narrower difference. Indeed describes this seniority pattern as suggestive because most of the underlying regression terms are not statistically significant.

This nuance is crucial because automation is shifting employer expectations rather than wiping out whole careers altogether. Businesses can use AI to handle routine tasks such as coding, research, data analysis and drafting, while putting a premium on personnel capable of overseeing automated platforms, blending them into daily operations and tackling tougher challenges.

AI-Linked Layoffs Add a Stark Counterpoint

Yet job losses form another part of the technological shift, with US employers increasingly citing AI among the reasons for workforce reductions.

Challenger, Gray & Christmas reported that through August 2026, AI had been cited in 116,175 announced US job cuts, making up roughly 22% of all recorded cuts. While this tech remained the top justification for terminations overall this year, it slipped to fourth in August alone, accounting for 3,462 announced job cuts.

These figures have climbed dramatically over the last couple of years, with Challenger tracking 54,836 artificial intelligence-driven staff reduction announcements in 2025. Ever since the firm started monitoring this category separately in 2023, employers have cited AI in more than 170,000 announced cuts.

These statistics require careful interpretation. An employer citing AI does not mean the technology alone caused every affected position to disappear. Corporations often pair technology adoption with corporate restructuring, budget tightening, strategy shifts and broader workforce reorganisation.

Even so, this clear trend stands out across major business moves.

Big Companies Put AI at the Centre of Restructuring

In February, Block announced plans to eliminate more than 4,000 jobs — nearly half its workforce — as part of an overhaul centred on artificial intelligence. Chief Executive Jack Dorsey noted that artificial intelligence has transformed business execution, enabling leaner teams to achieve greater output.

Amazon similarly cut jobs within its artificial general intelligence division in July, building on a broader reduction affecting about 16,000 roles across the company announced in January. Leadership explained that these specific intelligence reductions aimed to focus priorities and fast-track key focus areas.

Meta has likewise reshaped operations around automated tools. Its Project OT effort aimed to build compact, technology-backed groups with objectives that could have slashed headcount significantly. Parts of the strategy were subsequently scaled back, although the company's restructuring around AI remains part of its broader workforce strategy.

Entry-Level Workers Face Growing Pressure

Junior staff confront a unique hurdle. The evolving employment gap may transcend a simple split between technology roles and traditional careers, shifting instead towards a separation between individuals who leverage automation to boost efficiency and those whose duties face replacement.

Indeed data reveals that programming job listings rebounded heavily over the past year, though 71% of the increase between May 2025 and May 2026 came from senior positions, while 37% came from jobs that explicitly mentioned AI in their titles. The two categories overlap.

This trend signals mounting pressure for novices. If automated systems take over more of the routine responsibilities traditionally assigned to junior workers, companies may have less need for entry-level staff to perform those tasks.

The International Labour Organization (ILO) points out a parallel threat. Its June 2026 review of empirical evidence found that large-scale job displacement remains limited so far, while warning of growing inequality and the erosion of employment opportunities for younger workers as AI changes how work is organised.

Approximately one in four workers globally are in occupations with some degree of exposure to generative AI. Yet the organisation emphasises that exposure does not guarantee termination, as most roles mix automatable and manual duties, pointing towards transformation rather than total elimination.

Similarly, the World Economic Forum anticipates broader structural shifts will generate 170 million positions globally by 2030 while displacing 92 million, yielding a projected net gain of 78 million roles across the wider economy. The WEF figures cover technological, economic, demographic and other structural changes, rather than AI alone.