Survey finds CEOs cutting junior roles to AI: How it impacts IT

Impact on IT department structures

AI is eroding the traditional entry points to a career in IT. Repetitive tasks, considered the bread and butter of learning in early-stage careers, are ripe for automation. The IT help desk, for example, is a prime target for a shift away from human hiring to AI. In 2024, Palo Alto Networks cut its IT support team by roughly half, with plans to reduce it by 80%, according to a CNBC report.

Junior software developer roles could also dwindle in favor of AI. Tools such as Claude Code can churn out code and documentation and then test and validate much faster than seasoned developers, let alone those just starting out in their careers. The New York Times describes how many developers today are writing less code and instead focusing on directing agents to write code on their behalf.

If companies continue down the path of putting AI to work instead of junior talent, IT teams, and entire organizational structures will look different. The traditional pyramid structure -- a large base of entry-level employees supporting a smaller group of mid-level employees, both of which are overseen by top-tier senior talent -- could morph into a diamond shape. PwC describes the diamond structure as "a small leadership team, a strong middle layer, and a narrow base of new talent."

Not all potential organizational shifts are built on the premise of reduced junior talent. IT teams could also morph into an inversion of the diamond structure: the hourglass. In this organizational model, talent flows to the top and bottom, narrowing at the middle. AI lessens the need for middle managers, the base of AI-literate entry-level workers expands and room for highly skilled leaders grows, according to PwC.

Human talent might slide to one end in the barbell model. In this structure, "high-value human work" sits opposite "AI-automated workflows," while "routine knowledge work" declines in the middle.

Other organizations may seek to create pods of human talent that have cross-functional expertise. IBM, for example, has formed "AI fusion teams" to partner with various business stakeholders.

"In the past, where I would just have a core platform team, I formed fusion teams that are more malleable, more adaptable to be able to go and focus on specific business outcomes and then maintain those assets afterward," Matt Lyteson, CIO, technology platforms at IBM, told TechTarget. "These fusion capabilities are directly tied to business functions in order to develop more of the agentic…capabilities."

The argument for junior talent

While some companies are cutting hiring for junior talent roles, others see value in the opposite approach. The Oliver Wyman Forum survey found that companies leading on AI ROI are hiring junior workers at a higher rate than companies finding ROI difficult to achieve -- 24% versus 17%.

What kind of value can junior IT talent deliver when much of the work that they have traditionally performed at the beginning of their careers can be automated?

"I very strongly feel that this is actually the most appropriate time for us to hire people coming with fresh ideas, fresh graduates, because these are the people who are closest to the technology disruption that's happening," Sumit Johar, CIO at BlackLine, said.

Junior talent also come to their first jobs without decades of experience built before the current adoption wave of generative AI and agentic workflows. That lack could, in some ways, be an asset, according to Johar.

"The challenge that we see is more on the senior staff that we have because it is difficult to unlearn something that you have already learned," he said. "If you have been performing a role for 20 years; you're an experienced professional. You're probably going to display a lot more inertia to a change than a junior person."

Many people in senior IT roles can and will adapt to AI, but organizations that place a premium on that high-level talent and automation could find themselves at a disadvantage in the future.

"You hire fewer early-career employees, fewer less experienced hires, then you're essentially outsourcing your talent development to your competitors," said Kaelyn Lowmaster, director analyst in the Gartner HR practice. "If you're not developing people in-house, you might have talent pipelines internally that dry up."

What this means for traditional career paths

The Oliver Wyman Forum survey indicates a trend of reduced hiring of junior talent. But other reports, like Gartner's, suggest that more jobs will eventually emerge in response to AI. The fear of AI job loss may even be exaggerated; CNN recently reported that job openings for software engineers are actually growing.

While AI's long-term impact on entry-level roles is still up for debate, IT workers seeking employment face a tough job market today. This year alone, more than 160 tech companies have cut over 116,000 tech jobs, Layoffs.fyi reports. Finding a job can feel like flinging resumes into a void. Despite what appears to be a strong job market, getting hired is a major challenge for many people, CNN reports.

In this environment, the traditional IT career path visualized as a ladder -- start at the bottom rung and climb up to mid-level and senior roles -- is changing. The bottom rungs of the ladder may not be disappearing entirely, but the competition to reach them is fierce, and once people start their climb, the expectations are different.

IBM, for one, examined how AI would affect certain IT roles and began to redefine them a couple of years ago, according to Lyteson.

"We're not going to hire any more system administrators. We're going to hire site reliability engineers," he explained. "Now the expectation is that you're able to come in and work alongside the AI to, yes, do those tasks, but more importantly, think about the end-to-end

impact of that and how we may look at improving the operation overall."

Similarly, at BlackLine, the expectation is for junior talent to do more alongside AI. "We're saying, 'Hey, can we elevate these junior roles, so they are able to perform much higher, much more impactful contributions?'" said Johar.

How exactly junior IT talent will grow their careers will depend on the organizational models that their employers embrace. AI literacy will be a baseline expectation from employers. IT workers may need to find other ways to differentiate themselves and advance in their organizations.

"Technical skills ultimately are going to become commoditized, meaning that you will have a lot of people who can build agents," said Johar. "Your key differentiation is your domain knowledge."

Executive takeaway

It can sound like IT jobs, entry level and beyond, are doomed or on the precipice of flourishing like never before, depending on who you ask.

"We're in very much the messy middle right now where the impact of AI on the workforce is running ahead of the value that AI is creating for most organizations," Lowmaster said. "We're going to see that gap close over the course of the coming two to three years."

As that gap closes, CIOs can watch industry-wide hiring and firing trends. But they also need to think about their own enterprises' approach to junior talent and their IT team structure.

Employee retention

The "low-fire, low-hire" environment can push employee retention down on the list of CIOs' priorities. The challenge of finding new jobs often keeps people where they are in this environment. But that could change over time.

"In our data, we've started to see pent up attrition risk," Lowmaster shared. "We've seen job satisfaction rates decline, and we've seen intent to stay decline. Organizations that say – 'we don't have a retention problem right now.' You do; you just aren't seeing it quite yet."

CIOs need to consider if the IT team structures they are building are prepared for potential attrition, particularly if there are no plans to bring in fresh talent.

Defining IT roles

CIOs have a role in defining the shape of IT career paths for their employees. Amidst all the noise surrounding AI, workers need clarity around their roles and expectations.

"We found that clarity around role and future potential for that role actually makes it more likely that an employee is going to engage with AI tools in the way that organizations want them to," Lowmaster said.

Fostering junior talent

Whether teams add more junior roles or fewer, it remains important to engage with that talent and prepare them to support whatever IT team structures emerge from AI disruption. CIOs need to help junior-level workers develop the skills the enterprise needs to move forward.

At IBM, junior-level employees partner with a senior-level architect in some cases. Lyteson also seeks opportunities for "showcases," in which he engages talent at various levels within his team. Recently, an entry-level worker showed him how she was using IBM Bob, the company's AI coding agent.

"We get exposure to them as senior leaders within the organization, and simultaneously, it gives them an opportunity to grow as they're showing off some of the great work that they're doing," said Lyteson.

Short-term efficiency gains versus long-term planning

Long-term planning is a vital element of the CIO's job. Are the decisions they are making about their team structure today sustainable?

Lowmaster pointed out, "The most efficient move in the moment might not be the most value-generating move longer term when it comes to things that take a while to show up: skills development versus skills atrophy, talent pipelines and bare succession benches."

Carrie Pallardy is a freelance journalist with experience writing in cybersecurity, technology and healthcare. She currently covers a wide range of issues relevant to today's CIOs and IT leaders.