Employers Shocked by 'AI-Native' Graduates Lacking Critical Skills for Workplace

There is a growing concern among employers about a troubling trend in higher education—one driven by the rise of artificial intelligence. According to a New York financier who spoke to Financial Times journalist Gillian Tett, new hires labeled as “AI natives” are revealing alarmingly shallow ideas and skills.

The anonymous finance worker admitted that his firm now actively avoids hiring AI-literate STEM graduates, instead prioritizing humanities students.

“We want critical thinking, not just AI,” the financier told the FT.

Over the past several years, a surge of reports, studies, and analyses has highlighted a decline in literacy rates, social skills, and critical thinking among college students. While these issues predated the widespread adoption of AI, the technology appears to be accelerating the erosion of real-world abilities, particularly among young people who rely on it as a cognitive crutch.

The state of higher education has deteriorated to the point where many students are outsourcing their coursework to AI chatbots like ChatGPT—a shortcut that educators warn is even undermining their ability to engage in face-to-face discussions.

Though universities serve purposes beyond workforce preparation, one of their core functions is to equip students for professional life. The consequences could be severe, as Cal State Chico ethics professor Troy Jollimore warned in a 2025 New Yorker interview:

“Massive numbers of students are going to emerge from university with degrees—and into the workforce—who are essentially illiterate.”

While advocates emphasize the importance of “AI literacy”—the ability to use AI tools effectively—the reality is that many industries still prioritize traditional literacy and critical thinking. Despite AI’s potential, evidence suggests it has yet to significantly boost productivity in the U.S. This means students who over-rely on AI at the expense of foundational skills may struggle to meet workplace demands.