Anthropic's junior hiring slows as revenue per employee surges
The Anthropic Institute's newest report says the company's junior recruitment has begun to slow down. Anthropic has been hiring for a smaller share of junior technical positions. Anyone who has tinkered with coding agents over the last ten months has seen this coming. Many top-tier economists remain dismissive of this concern. They never spent time with coding agents despite understanding that frontier models were increasingly capable. STEM academics also remain dismissive about AI capabilities. Frontier labs' revenues have grown so rapidly that their valuations match some of the world's largest companies. This is not an outlier event with no clear explanation. The death knell for entry-level jobs sounds loud. Undergraduate students need to prepare differently for a likely upheaval.
Revenue per employee dwarfs earlier tech giants
Anthropic has expanded rapidly. But it has hired less per dollar of revenue than an earlier generation of large tech companies. At five years old, Anthropic takes in between two and four times as much revenue per employee as Meta and Google did when they crested in their own rapid growth. Junior-level recruitment might be dropping because they need fewer people. Employees now do more than what they were initially recruited to do. Non-technical Anthropic employees are doing some technical work as they train into becoming Claude managers. From sales to legal, human employees are expected to do more and different tasks. Roles broaden to include building products, managing agents and tackling the strategic and interpersonal work that remain beyond the scope of the best LLMs.
Universities face enrollment cliff as entry-level jobs shrink
There are many reasons to be worried if you are a student in higher education, especially in STEM. Those training in domains affecting the physical world — civil, mechanical, aerospace, manufacturing — could be offered some respite. Others predict an industrial explosion, meaning full physical labor automation, within a decade. Skepticism of such automation is reasonable but could be misplaced. A year ago most people would have laughed at the idea of super-capable coding agents. One observer changed their mind after spending thirty-six hours with coding agents starting at 11 am on New Year's Eve. Reading these patterns forward suggests that AI diffusion could risk worker displacement. This will hit academia hard and soon. Most academics and staff remain unaware and therefore dismissive about current AI capabilities. The majority do not have subscriptions to top-tier models, do not work with coding agents, and do not track the latest developments on social media. Each of these feels like a full-time job. The higher-ed system is unprepared for AI's impacts as they diffuse through the economy.
Academic jobs will vanish as student demand drops
One consequence of this unpreparedness is that academic jobs will start to vanish as student applications drop in reaction to a shrinking entry-level job market. Computational STEM will be hit first. Software engineering and computer science jobs will increasingly be automated. Whole departments could fold and eventually entire universities could follow.
Anthropic builds early warning system for job transformation
Anthropic is already preparing for this future. The company is standing up an ongoing early warning system to monitor jobs facing AI-driven transformation. Universities should follow suit, which requires them to become aware first. They will realize that this is also insufficient to safely navigate longer-term issues. None of these actions will prevent powerful AI from disrupting jobs.
Preparedness buys time for a different university model
Preparedness will buy universities time to course-correct towards a model where students graduate with agency, not just a certificate. Universities ought to pivot towards becoming incubators of talent. Students would work on creating single-person or few-person startups with agents at the core. These startups could eventually identify person-shaped holes and create meaningful niche human jobs. At the start of this year, students were warned that entry-level jobs will shrink. They were advised to expand the scope of their final year projects with coding agents into something that could outlast their degree and provide a pathway to secure self-employment. This has not borne fruit yet but evidence of change appears in this year's cohort of final-year students.