Remote Work vs. AI: Which Is Really Killing Entry-Level Jobs for College Grads?

If you're just starting your career, your boss might expect to see you in the office more often than your colleagues. UK fintech company Revolut recently said that, starting in 2027, interns and participants in a program for recent grads will be expected to work in the office at least three days a week. The company will continue to allow other employees to choose whether to work remotely or in person.

Revolut says the change reflects the value of IRL learning for workers early in their careers. "You don't just learn from your manager telling you what to do. You actually observe how other people conduct their work," said Queenie Li, the company's head of talent programs.

Researchers broadly agree that early-career employees benefit from in-person mentorship and informal learning.

Yet as firms like Revolut draw distinctions between junior and more experienced workers, labor market observers remain divided over the relative roles that remote work, AI, and other factors might play in employers' willingness to hire entry-level employees in the first place.

It's an important question because, for decades, college graduates in their early to mid-20s typically had a lower unemployment rate than the overall workforce. That's no longer the case. Since late 2018, these workers have often faced a higher jobless rate than the workforce as a whole, according to the New York Federal Reserve.

The remote-work effect

Peter John Lambert, a postdoctoral research fellow at the London School of Economics and the University of Warwick, and a colleague recently concluded that remote work better explains the decline in entry-level hiring than AI. They found that the share of entry-level hires fell by as much as 29% in recent years, while hiring for senior positions rose by more than 5%.

One reason it's easy to conflate AI's impact with that of remote work, Lambert said, is that both are associated with desk jobs that can be done from afar. Lambert said remote work is the more likely reason for the drop because the slowdown began before GenAI tools emerged.

New York Fed researchers reached a similar conclusion. The setup makes it harder for managers to train and mentor new employees, they said. When colleagues are separated, "feedback tapers off dramatically." The loss in feedback is more pronounced for younger workers.

Not everyone agrees. Nicholas Bloom, an economics professor at Stanford University, said that remote work, AI, pandemic-era learning losses, and a broader hiring slowdown are all plausible explanations, but current data can't determine which factors are driving the trend.

The AI effect

In recent research, Mark Ma, an associate professor at the University of Pittsburgh School of Business, found that companies with AI in job titles or job descriptions reduced overall hiring, with the biggest declines in early-career roles. "They are getting rid of these junior positions because the junior-level work could be more easily replaced by AI," he said.

Ma said that because remote work rates were higher a few years ago than they are now, recent grads should have had a tougher time then than they do today. Yet, he said, "the problem is getting worse now." At the same time, firms with more remote job postings increased, rather than reduced, hiring for junior positions overall.

Making learning happen

For those who do get jobs, many welcome at least some in-person work. A 2025 Gallup survey found that only about a quarter of Gen Z workers who could do their jobs remotely wanted to do so full time, compared with about one-third of older generations.

Hybrid setups can be a "happy medium" and an effective way to ensure early-career workers get the mentorship they need, said Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research. Remote workers — especially those early in their careers — don't necessarily pick up on all the things that will make them as productive unless they're in the office to witness them. "In some cases, they end up being unhappy because they're just not learning some things," Hershbein said.

Making learning happen was part of what drove the thinking behind Revolut's in-office requirement for interns and some early-career workers. The firm plans to bring on about 500 interns and graduate-program participants in 2027, up from about 300 this year.