AI startups favor senior hires as entry-level tech roles shrink
New research says AI-native startups use smaller, flatter teams and hire fewer junior workers than other young companies.
By Daniel Okafor · Business Editor
3 min read
AI-focused startups are hiring fewer beginners and relying more on experienced technical workers, according to research from Harvard Business School and INSEAD. The findings point to a tighter path into tech for young workers as AI companies build leaner teams without giving up fundraising strength or valuation, the researchers said.
The study found that startups built around AI-enabled products and processes employ about 15% fewer entry-level workers than comparable non-AI startups. Harvard Business School and INSEAD researchers also said these companies tend to cluster in Silicon Valley and have workforces that are more male, more likely to hold advanced degrees and more often drawn from elite employers and institutions.
According to the study, AI-native startups do not appear to be replacing junior staff with layers of management. Instead, the researchers found that these companies have about 20% more senior employees than their peers while employing 15% fewer managers.
That structure leaves more veteran workers in specialized roles, especially technical ones, the study said. The share of engineers at AI-native companies was 13% higher than at traditional startups, according to Harvard Business School and INSEAD.
Lean teams, strong investor backing
The research found that AI-native startups raise roughly similar funding and reach valuations comparable to non-AI startups. On a per-worker basis, however, the AI companies raise about 20% more capital and carry higher valuations per employee, according to the study.
Those figures suggest investors are backing companies that can scale with fewer people, the researchers said. If that pattern continues, early-career workers may face fewer openings at the companies receiving much of the current AI investment.
The shift contrasts with an earlier image of the technology industry as a place where young founders and new graduates could move quickly into prominent roles. Fortune noted examples such as Bill Gates leaving Harvard at 20 to build Microsoft and Mark Zuckerberg cofounding Facebook at 19 while at college.
Gen Z share falls at tech companies
Separate research from compensation management company Pave found a similar aging trend across technology companies. Pave said the share of Gen Z workers ages 21 to 25 at large public tech companies fell from 15% in January 2023 to 6.8% in August 2025.
Pave found a smaller but still clear drop at large private technology companies over the same period. According to the company, early-career Gen Z workers declined from 9.3% of those workforces to 6.8%.
The average tech worker also got older during that period, Pave said. At large public technology companies, the average age rose from 34.3 to 39.4, while at large private tech companies it increased from 35.1 to 36.6, according to the firm.
Matt Schulman, Pave’s founder and CEO, told Fortune last year that more senior workers often perform jobs requiring human judgment that AI has not displaced. He said a 22-year-old doing more routine spreadsheet-heavy work may be more exposed to automation than a worker who is 35 or 40 and more established in a career.
This story draws on original reporting from Fortune.