There is a troubling trend spreading across some of today’s most recognizable tech companies. Spotify, Shopify, Dropbox, and others are cutting training programs and significantly reducing entry-level hiring. At first glance, the decision might seem sensible: reduce costs, restructure teams, and prepare for a future driven by AI. In reality, it is a short-term move that will cause long-term damage.

The numbers tell the story. The unemployment rate for recent college graduates has climbed to 5.8%, higher than the national average and the worst in a decade outside the pandemic. More than 40% of graduates are underemployed, working in roles that do not require a college degree. Entry-level postings in the United States have fallen by more than 40% since mid-2022. Even graduates in traditionally “safe” majors such as computer science or engineering are struggling to find jobs that match their training.

Young professionals are not just looking for a paycheck. They want a chance to learn, to join a program, and to work with a team that believes in their potential. When companies dismantle these programs, they are not simply shrinking headcount. They are cutting off the future of their own talent pipeline.

AI is advancing rapidly, but despite the hype, it cannot replace human intuition, creativity, and judgment. These are the qualities that truly differentiate companies. What we need now are people who can work alongside AI: analysts who know how to use machine learning to make smarter decisions, design better products, and deliver more personalized customer experiences. That kind of talent is not built overnight. It is developed through years of deliberate investment.

The path forward is clear. We need a new model for workforce development, one that embraces what I call Human Digital Resources—humans and AI working side by side, each playing to their strengths. Humans bring judgment, creativity, and empathy. AI brings speed, scale, and pattern recognition. Companies that design roles and training with this collaboration in mind will outperform those that treat AI as a replacement strategy.

The Danger of Short-Term Thinking

The labor market for new graduates is already challenging. Opportunities are shrinking. Unemployment among recent grads is high, and even industries once seen as secure are slowing their hiring.

Cutting analyst or associate programs may satisfy investors for a quarter, but it leaves companies with a weakened leadership bench for years to come. These programs have always been launchpads for promising talent. They build business acumen, sharpen technical skills, and embed cultural knowledge that cannot be hired overnight.

One financial services firm I know kept its analyst program during a period of layoffs. Today, it has a deep bench of AI-literate, future-ready leaders. Competitors that cut their programs are now scrambling to fill those same roles, paying more to hire externally and facing longer onboarding timelines.

The downside is more than a temporary talent gap. It is the slow erosion of institutional knowledge, innovation capacity, and cultural continuity. These are elements that cannot be replaced by technology or by hiring quickly from the outside.

Human Plus AI Is the Real Advantage

AI is changing the game, but it is not replacing the players. It can process vast amounts of data in seconds, yet it cannot create culture, uphold values, or build trust within teams. Think of it as an open-book test. Without skilled humans who know how to use the book, it is useless.

Even AI’s own development proves the point. ChatGPT was trained by thousands of human reviewers, most of them college-educated, who provided judgment, context, and feedback to improve the tool. AI is powerful, but it still depends on human expertise to evolve.

Forward-looking companies are already building Human Digital Resources. They are hiring and training employees to integrate AI into their daily work. At one firm, Gen Z analysts were given early access to AI tools. Within months, they became the company’s internal AI experts, streamlining processes, improving efficiency, and teaching senior staff how to use the technology effectively.

A New Shape for Organizations

For most of the 20th century, companies were shaped like pyramids, with a large base of junior employees feeding into progressively smaller layers of management. More recently, some consultants have suggested a “diamond” model, with a narrower base, a wider middle, and a slim top.

The future will likely be something else entirely: a fluid blend of consulting-style apprenticeships, the flexibility of the gig economy, and AI-enabled work. Professionals will contribute to multiple projects across different companies, with AI acting as a force multiplier.

This model rewards adaptable, multiskilled people who can work across ecosystems. Gen Z is well positioned to thrive in this environment. They are digital natives who grew up with technology and are already experimenting with AI tools. Instead of sidelining them, companies should tap into their curiosity and comfort with technology, reduce administrative work, and give them meaningful problems to solve earlier in their careers.

One leading financial institution recently offered an example of getting this right. It has invested in both culture and technology, treating AI as a tool for empowerment rather than a threat. This approach strengthens talent pipelines while others risk letting theirs dry up.

AI Changes Work, It Does Not Remove It

History offers perspective. The industrial revolution created new kinds of skilled labor. The calculator replaced manual math, yet we still teach math, so people know how to use calculators effectively. The internet reshaped communications without eliminating the need for communicators.

AI will follow the same pattern. It will redefine roles, raise the bar for human skills, and amplify those who are trained to use it well. Technology may become the baseline, but people will continue to create value in ways that are unique and hard to replicate. A competitor can match your tools, but they cannot match your culture, your innovation, your trust, or your ability to execute through people.

Companies that continue hiring and training early-career professionals will be better positioned for this transition. They will have AI-literate teams with deep knowledge of the business. Those that do not will face leadership gaps they cannot fill quickly or cheaply.

Competitive advantage

Learning compounds over time and so does neglect. I have seen companies that invested in analyst programs years ago now benefiting from leaders who came up through the ranks. Those early investments paid off in loyalty, expertise, and competitive advantage.

Cutting these programs today is like removing the foundation from a building to save on maintenance. It might hold for a while, but eventually it will collapse

The future of work is not less human. It is more human. It is more mentorship, more learning, and more collaboration between people and machines. Companies that embrace Human Digital Resources now will lead the next decade. Those that do not will be left wishing they had thought further ahead