New Study: Industries Cutting Jobs Fastest While Funding AI

Young Nevadans are losing their first jobs to AI, with entry-level hiring down more than 40%, according to an October 2026 job market report. The newly released study by HR.software reveals the top 10 states where landing a first job is getting harder as AI takes on more of the work.

• Alabama employers now hire 44% fewer young workers than three years ago in industries where AI can handle the work.

• Nearly 1 in 5 early career jobs are gone in Mississippi because of automation, with the AI industry up nearly 20%.

• Young workers are vanishing from AI-exposed fields in Vermont, with their share down 28% since 2022, the sharpest fall in the country.

The research examined nearly 50 US states to find where AI is taking over entry-level work. The report measured how many jobs AI industries added since 2022, along with the growth in employment for workers aged 35 and over, which shows whether these companies are favoring experience. It also looked at the share of jobs and the number of new hires for workers aged 22 to 24 in industries where AI can do basic tasks, to see whether young people are being pushed out. These figures were combined into a single score out of 100, revealing where AI is freezing entry-level hiring the most.

Here’s a look at the top 10 states where AI is freezing entry-level hiring:

* All percentage changes are calculated for the period from 2022 to 2025.

1. Nevada

• AI industries job growth: 18.4% since 2022

• All private industries job growth: 5.8% over the same period

• Employment Growth Among AI-Experienced Workers in AI-Building Industries: 21.5%

• New hires aged 22 to 24 in AI-exposed fields: down 40.7%

Nevada’s AI boom is hurting youth employment. The AI industry here grew 18% since 2022, about three times faster than the state’s job market overall. Most of that growth went to people with experience, as employment among workers aged 35 and over jumped by more than a fifth. Graduates in fields where AI can handle the work saw the opposite trend, as new hires aged 22 to 24 fell 41%. Nevada’s AI industry is hiring, but it’s mostly hiring people who have done the job before, while increasingly eliminating the entry-level positions.

2. Alabama

Alabama is also experiencing a fall in youth employment in the fields that are most exposed to AI. The state’s tech industries grew by around 3% in three years, a slower pace than its job market overall, yet jobs held by 22- to 24-year-olds in the AI-exposed sectors still dropped by 29%, almost 3 in 10. Employers brought in far fewer young people too, with new hires falling from 6.2K to 3.5K. For a graduate in Alabama, the first job is getting harder to find as AI works its way into more industries, even at a modest pace.

3. Mississippi

Mississippi’s AI industry is small, but it’s one of the fastest-growing in the country, adding about 1.6K jobs since 2022. Workers aged 35 and over filled roughly 800 of them. Meanwhile, employers in AI-exposed fields cut hiring of 22- to 24-year-olds by 43%, which is around 1.8K fewer people getting in the door. Young people in Mississippi lost about as many openings as the AI industry created jobs, so the growth is passing them by.

4. Washington

In Washington, young workers took the hardest hit of any state. Jobs held by Gen Z in industries most affected by AI fell by 30%, and new hires nearly halved, from 10.4K to 5.6K. Industries developing AI shrank too, losing about 8.4K jobs since 2022. Yet workers aged 35 and over came out in a better position, with their numbers edging up and their share of jobs in these sectors rising to 54%. When employers trimmed overall, it was the youngest workers who felt it most.

5. New Mexico

New Mexico rounds out the top five, as it has pulled back on young hires more than any other state. Employers in automation-prone fields brought in nearly half as many young workers as in 2022, with new hires dropping from 1.7K to just 872. At the same time, the state’s AI-building industries grew 8.5%, ahead of the 5% growth in private jobs overall, and experienced workers saw their employment rise by 11%. This indicates that as AI becomes more common in New Mexico’s workplaces, entry-level jobs are the ones being cut.

Hanna from HR.software commented on the findings:

“A February 2026 survey of 933 US business leaders found that 21% of companies have already frozen entry-level hiring, citing AI, and 36% expect to stop by the end of 2026. That creates a problem down the road. Every manager started as a junior, and a company that stops training them will eventually run short of experienced people. Businesses that skip the first rung may find, in five or ten years, that nobody is ready to step into senior roles.”