Why Are Tech Graduates Struggling to Find Jobs in 2025
TECH
In 2025, recent college graduates with degrees in science, technology, engineering, and mathematics (STEM) are encountering a deteriorating job market. Once seen as a reliable path to stable employment, a STEM degree now offers fewer guarantees than in previous years. Only 27% of new graduates in these fields have secured a job related to their studies within six months of graduation—a sharp decline that reflects the broader fragility of the current labor market.
The unemployment rate for recent college graduates reached 5.8% in March 2025, up from 4.6% a year earlier. Historically, college graduates experienced lower unemployment rates than the general population. That trend is weakening. Today, the difference between the unemployment rate for degree-holders and the national average has narrowed to its lowest point in decades, illustrating the growing challenges faced by young professionals attempting to enter the workforce.
Even among those who are employed, a significant number are underemployed. In March 2025, 41.2% of recent graduates were working in positions that do not require a college degree, up from 40.6% in March 2024. The rise in underemployment is particularly concerning in technical sectors, where the expectation has long been that educational credentials would lead directly to appropriate roles. Instead, graduates are increasingly taking jobs unrelated to their training.
A Weakening Pipeline: Fewer Internships and Higher Barriers to Entry
Internship opportunities, often viewed as a key entry point into the tech industry, have also declined. Compared to the previous year, internship offers dropped by 11 percentage points this spring. Traditionally, internships serve as an on-ramp to full-time employment, allowing students to build experience and demonstrate job readiness. The current reduction in opportunities breaks this pipeline and leaves graduates without essential work history.
Moreover, even “entry-level” tech jobs have become less accessible. Employers are now demanding several years of experience for roles that were previously open to new graduates. This trend creates a paradox: candidates are expected to have hands-on experience, yet the positions that provide that experience have disappeared. As a result, both job seekers and companies find themselves in a state of paralysis. Employers hesitate to hire, uncertain about market conditions, while graduates face ever-higher barriers to entry.
The contraction is not confined to the technology sector. Between February and March 2025, a survey found that major firms such as Chevron, PepsiCo, and Southwest Airlines reduced their hiring plans for new graduates. Only 24.6% of employers indicated an intention to expand entry-level hiring in spring 2025, down from 27% the previous fall. This marks the lowest level since fall 2020, during the peak of the COVID-19 pandemic.
The salary outlook adds another layer of complexity. Projected salaries for computer science graduates in 2025 are expected to fall by 3.6% compared to the previous year. In contrast, degrees in agriculture and natural resources are projected to see a 2.8% increase. However, these projections were made prior to the new administration's policy changes, which have significantly altered the economic landscape. The real impact of fiscal adjustments and trade policies remains to be seen.
Policy Shifts and Economic Uncertainty: A Hostile Environment for New Graduates
The job market has been further complicated by a series of federal policy changes. In early 2025, the government reinstated forced collection on delinquent federal student loans. This includes paycheck deductions, tax refund seizures, and the garnishment of Social Security and disability benefits. These measures reverse the pandemic-era suspension implemented in 2020 and place additional financial pressure on young professionals already struggling to find stable employment.
Data shows that 20.5% of federal student loan borrowers were more than 90 days delinquent on their payments in early 2025, up from 10.5% five years earlier. This increase in delinquency coincides with the decline in entry-level job opportunities and contributes to growing financial instability among recent graduates. The burden of debt is particularly heavy in the tech sector, where positions are disappearing even as education costs remain high.
Wider economic indicators point to continued volatility. While 177,000 jobs were created nationwide in April 2025—a figure that exceeded expectations—economists warn that hiring activity is slowing. Wage growth has stagnated, and job search durations have increased. Analysts note that many companies are taking longer to make hiring decisions, citing concerns over global trade conditions and domestic policy shifts.
Federal budget cuts have also played a significant role in reducing job availability. Since the beginning of the current administration, the federal civilian workforce has been reduced by 26,000 positions. In total, approximately 260,000 federal employees have taken early retirement, been laid off, or accepted severance packages. Key science and technology agencies such as the National Science Foundation and the National Institute of Standards and Technology are facing a $2.7 billion funding shortfall. This reduction in public investment has limited opportunities for research, development, and technical innovation—areas that traditionally provide employment for STEM graduates.
Consumer sentiment has also taken a hit. In 2025, consumer confidence dropped to its lowest level in 13 years. As households reduce spending, demand for goods and services declines, leading businesses to cut costs and freeze hiring. Many technology companies, especially those that depend on consumer sales, have responded by downsizing their workforce and postponing expansion plans. This behavior reinforces the contraction in the job market and contributes to a cycle of economic stagnation.
The Rise of AI: New Roles, Fewer Entry Points
Artificial intelligence is transforming the job landscape in ways that are both generative and exclusionary. By 2025, it is estimated that AI will replace approximately 85 million jobs globally but will also create 97 million new roles. This represents a net gain of 12 million jobs. However, many of these new roles require advanced or highly specialized AI skills—skills that most recent graduates have not yet acquired. Without targeted training and upskilling programs, many are excluded from these emerging opportunities.
In the tech sector, automation has already eliminated many entry-level positions. Basic tasks once handled by junior employees are now performed by AI systems. At the same time, the hiring process itself has changed. As of mid-2025, around 65% of HR departments report using AI tools for candidate screening, onboarding, and even retention forecasting. These systems prioritize specific qualifications and practical experience, often disqualifying applicants who lack hands-on industry exposure.
This dynamic creates a further barrier: employers demand experience, but no longer offer the internships or entry-level roles that would allow candidates to gain it. The result is a narrowing of the hiring funnel. Many young professionals find themselves shut out of the job market altogether, despite having the academic background typically associated with employability.
According to recent estimates, over 120 million workers worldwide will require reskilling or retraining due to AI-related transformations in the labor market. However, many of the available retraining programs are geared toward mid-career workers and are not accessible to recent graduates. Additionally, the cost of such programs can be prohibitive, especially for those already burdened by student debt.
The changing landscape has also had a psychological effect on young professionals. A national survey of college students graduating in 2025 found that more than half had abandoned the idea of landing their “dream job.” Furthermore, 56% of final-year students said they felt somewhat or very pessimistic about their entry into the job market. These figures reflect a profound sense of uncertainty among those who have invested heavily—both financially and emotionally—in their education, only to encounter an increasingly closed-off professional world.