Tech companies like Meta and Google have developed reputations for snapping up talent before they get out of college and putting them into six-figure positions. But now the incoming wave of new AI startups is turning away young, digitally native workers in favor of their more experienced counterparts.
According to researchers at Harvard Business School and nonprofit business school INSEAD, AI-native startups are building smaller and flatter teams with fewer starters than their non-AI counterparts.
It has been found that companies developing AI-powered products and processes employ around 15% fewer entry-level professionals than traditional startups.
And there is a specific archetype for who is most likely to fill their cubicles: “They are geographically concentrated in Silicon Valley and employ a workforce that is more likely to be male, more likely to have advanced degrees, and come from more prestigious employers and institutions,” the study says.
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AI-native startups still thrive with less experienced employees
The results confirm the career dilemma that fierce young talent is being overlooked in the age of AI. The lowest rungs of the career ladder have been reached – and experienced professionals are having a field day.
These AI-native startups had a roughly 20% higher proportion of senior executives than their peers. Yet these companies have 15% fewer managers and flatter hierarchies; Instead of putting experienced talents into management positions, they are funneled into highly specialized, technical jobs. The proportion of engineers at AI-native companies was 13% higher than at other traditional startups.
These smaller, more frugal companies raise a similar amount of funding and command just as high valuations as non-AI companies; According to the study, they raise about 20% more capital per employee and have a higher valuation per employee.
And if investors continue to pump money into small AI companies with experienced talent, young professionals could find even fewer opportunities to get their foot in the door.
The proportion of Gen Z workers at tech companies has halved in just two years
Young entrepreneurs have been the face of technological change for decades. Microsoft co-founder Bill Gates dropped out of Harvard University at the age of 20 to build the software giant. Meta CEO Mark Zuckerberg was just 19 years old when he co-founded Facebook in his Ivy League dorm room. But now young professionals are being eliminated from the organizational charts.
According to a study published last year by compensation management software company Pave, the proportion of young Generation Z employees aged 21 to 25 at technology companies halved between 2023 and mid-2025. These young workers made up 15% of the workforce of large public technology companies as of January 2023; in August 2025 they only made up 6.8%. The situation is also not good for large private technology companies. During the same period, the proportion of Generation Z entry-level employees fell from 9.3% to 6.8%.
And similar to the Harvard Business School study, the research found that tech companies tend to be older and more experienced. The average age of a worker at a tech company rose dramatically in those two and a half years; The typical age of an employee at large public technology companies increased from 34.3 years to 39.4 years. On the private side, the change was more modest, only increasing from 35.1 to 36.6 years. And as more employers reduce their workforce in the name of AI efficiency, young professionals are more vulnerable to disruption.
“If you’re 35 or 40 years old, you’re pretty established in your career and have skills that you know can’t yet be impacted by AI,” said Matt Schulman, founder and CEO of Pave Assets last year. “There’s still a lot of human judgment when you’re working at a higher level… If you’re a 22-year-old who used to be an Excel junkie or something, then that can be disrupted. So it’s almost a tale of two cities.”
https://fortune.com/2026/07/07/ai-start-ups-snubbing-entry-level-talent-for-silicon-valley-men-top-degrees/
