In early 2026, unemployment for new graduates hit 5.6%, a 1.6 percentage point increase from three years prior, reflecting firms re-engineering cost structures around artificial intelligence. A July 2026 policy brief from the Stanford Institute for Economic Policy Research (SIEPR) confirms the aggregate impact of AI on total employment remains small, but masks a structural hollowing of the labor market. Employment for 22-to-25-year-olds in AI-exposed occupations, such as software development and customer service, has declined since the launch of ChatGPT in late 2022, while employment for older, more experienced workers has remained stable or grown. This "junior-gap paradox" shows AI agents boosting less-experienced workers' productivity while firms cut entry-level roles. Erik Brynjolfsson, co-chair of the National Academies report on the future of work, notes LLMs operate in the mental world of knowledge work, impacting jobs differently than physical robots. Cisco is rolling out AI agents to its 90,000-person workforce; CFO Mark Patterson noted 80 to 90 percent of the first draft of the management and discussion section in public filings is now AI-produced. Cisco frames its recent 4,000-job reduction as resource realignment. The Stanford AI Index Report 2026 highlights private AI investment reached $285.9 billion.