College was once a one-way ticket to a secure, full-time job with health care and a 401(k). But in the AI era, this is increasingly becoming less and less of a dream.
That is most evident among recent graduates. Today, instead of betting on a full-time job, many Gen Z graduates are looking for alternative paths to employment out of necessity. ZipRecruiter’s 2026 Graduate Report found that more people are turning to non-traditional jobs right out of college.
According to the study, among the 1,500 class of 2025 graduates and the soon-to-be 1,500 class of 2026 graduates—about 38% are thinking of starting their own business, 32.5% are looking at gig work, 28% are looking for freelance work, and 11% are studying skills.
“Grads shared experience together through internships, side work, stepping-stone roles, and even starting their own ventures,” said Nicole Bachaud, labor economist at ZipRecruiter, in a statement. “There are fewer entry-level roles available, their path looks different, but many are finding their way.”
With a recent survey from the National Association of Colleges and Employers finding that employers plan to increase hiring of new graduates by 5.6%, Gen Zero finds itself in an increasingly precarious position in the labor market. Business leaders have sounded the alarm over AI’s potential to disrupt the workforce. And those warnings are beginning to bear fruit.
Jack Dorsey’s Block earlier this year cut 40% of its headcount due to AI efficiencies and has asked other firms to follow suit. And this week, Meta announced it was cutting 10% of its workforce amid heavy AI spending. Microsoft is also offering employee buyouts as a way to control costs amid a flurry of AI spending. Oracle cut workers last month for the same reason.
But layoffs are only half the story. A ZipRecruiter report found that entry-level job openings have dried up, making it difficult for recent graduates to start climbing up the corporate ladder. Entry-level job postings made up just 38.6% of all postings in March, down from 44% in 2023. This means more applications per open role. The number of clicks per job opening increased by nearly 22% year-over-year, suggesting tougher odds for job seekers.
All of this has resulted in the unemployment rate for recent graduates rising to 5.6% in December, up 1.7 percentage points from October 2022, according to data from the Federal Reserve Bank of New York. Meanwhile, the unemployment rate for all workers was 4.2%, up just 0.8 points over that period.
To be sure, Gen Z is still looking for work, especially when they choose roles outside of their desired fields. According to ZipRecruiter, one in four graduates are on their dream career path.
