The HR function is evolving as AI blurs the lines between people and technology leadership …
1. Why Firms Are Merging HR and IT Departments
What to Know:
AI is driving some companies to combine HR and IT, with 64% of large-company IT leaders expecting this within five years. Tracey Franklin, chief people and digital technology officer at Moderna, aligns workforce planning with tech and AI integration, aided by OpenAI. Software company Covisian merged the functions in 2023 to link tech development with employee training, creating tools such as an internal job board that doubled responses to job postings. Dutch digital banking firm Bunq houses both teams together to support automation, aiming to automate 90% of operations by year’s end without layoffs. Supporters cite faster execution, while experts warn of losing specialist expertise.
Why It Matters:
Merging HR and IT can speed AI-driven change by uniting people and tech decisions, but the trend also risks eroding core expertise.
While organizations reconfigure themselves for speed, the bigger question remains: What is AI actually doing to jobs?
2. AI and Jobs: The Final Word (Until the Next One)
What to Know:
Using five AI exposure measures, a recent report from the Economic Innovation Group found little evidence of broad job losses. From 2022 to early 2025, unemployment for the workers most exposed to AI rose 0.3 points, less than the 0.94-point rise for the least exposed. Labor force exit rates are flat, and switching to lower-exposure jobs has not increased. Industry data showed no consistent declines, and unemployment for exposed young workers and graduates mirrored their less-exposed peers. AI use in the production of goods or services is limited, with 9% of businesses using it and 27% of businesses in the information sector reporting use, according to a U.S. Census Bureau survey. Roughly the same number of firms expect AI to either raise or cut headcount, with effects mainly in task reallocation, not overall employment.
Why It Matters:
AI’s current labor market impact is muted and hard to separate from other factors. Slow AI diffusion, workforce composition, and firm-level task shifts may explain the absence of clear displacement signals. Near-term effects are more likely to change how work is done rather than reduce jobs, highlighting the need to focus on task-level changes, skill adaptation, and productivity gains instead of assuming large-scale unemployment.
The macro data shows only faint signals — but averages can hide what’s happening on the ground. For new entrants to the workforce, those signals aren’t faint at all …
3. Computer Science Grads Struggle to Find Jobs in the AI Age
What to Know:
AI coding tools and layoffs at major firms are reducing demand for entry-level software engineers. Among 22- to 27-year-olds, unemployment is at 6.1% for computer science majors and 7.5% for computer engineering majors, more than double the rates for recent biology or art history grads. Applicants report sending hundreds or thousands of applications, often filtered out by automated resume systems. Government tech jobs face freezes, and industry hiring increasingly favors AI skills. Some are pivoting to tech sales or marketing after failing to secure software roles.
Why It Matters:
AI adoption is reshaping entry-level tech hiring, eliminating many traditional coding roles. Without AI-specific skills, new grads face limited options, highlighting the urgency of adapting training and career plans to align with evolving technical demands.
For whole industries, AI is already rewriting operating models in ways that shrink traditional roles …
4. AI and Trump Put Consulting Firms Under Pressure
What to Know:
The Trump administration’s federal contract cuts and AI efficiency gains are hitting the consulting sector. Deloitte and Booz Allen Hamilton cut staff, Accenture reported revenue losses, and McKinsey & Company shed 10% of its workforce. AI undercuts billable hours and shifts clients toward tech firms such as Palantir. Firms are moving to project-based fees amid predictions of industry fragmentation.
Why it Matters:
Budget cuts and AI are reducing demand for traditional consulting, forcing firms to overhaul models or face contraction.
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