According to researchers at Harvard Business School and non-profit business school INSEAD, AI-native startups are building smaller and flatter teams with fewer entry-level workers than their non-AI-enabled peers.

It found that firms that build AI-enabled products and processes employ around 15% fewer entry-level workers than conventional start-ups. 

And there’s a certain archetype for who is most likely to fill up their office cubicles: “They are geographically concentrated in Silicon Valley, and employ workforces that are more male, more likely to hold advanced degrees, and drawn from more prestigious employers and institutions,” the study notes.

AI-native start-ups are still succeeding with fewer, senior employees

The findings reaffirm the career dilemma that scrappy young talent are being overlooked in the AI era. The bottom rungs of the corporate ladder have been kicked through—and seasoned professionals are having a field day. 

At these AI-native start-ups, the share of senior employees was about 20% higher than their counterparts. Yet, these companies have 15% fewer managers and flattened hierarchies; that’s because instead of sticking seasoned talent into supervisory roles, they’re being funneled into highly specialized, technical work. The share of engineers at AI-native firms was 13% higher than at other traditional start-ups. 

These smaller, scrappier companies raise a similar amount of funding and hit valuations just as high as non-AI firms; they raise roughly 20% more capital per employee and carry higher valuations per employee, according to the study. 

And if investors continue pumping money into small AI companies with seasoned talent, early-career workers could find even fewer opportunities to get a foot in the door.

The percent of Gen Z workers at tech companies halved within just two years

For decades, young entrepreneurs have been the face of tech transformation. Microsoft co-creator Bill Gates dropped out of Harvard University at 20 to build the software giant; Meta CEO Mark Zuckerberg was just 19 years old when he cofounded Facebook in his Ivy League dorm room. But now, entry-level workers are being scrubbed from the org charts.

The percentage of young Gen Z employees between the ages of 21 and 25 was cut in half at technology companies between 2023 and mid-2025, according to a study from compensation management software business Pave released last year. These young workers accounted for 15% of the workforce at large public tech firms in January 2023; by August 2025, they only represented 6.8%. The situation isn’t pretty at big private tech companies, either. During that same time period, the proportion of early-career Gen Z employees dwindled from 9.3% to 6.8%.

And similar to the Harvard Business School study, the research found that tech companies are skewing older and more experienced. The average age of a worker at a tech company rose dramatically over those two and a half years; the typical age of an employee at large public technology businesses rose from 34.3 years to 39.4 years. On the private side, the change was more modest, increasing only from 35.1 to 36.6 years old. And as more employers trim down their workforces in the name of AI efficiencies, entry-level roles are more vulnerable to disruption.  

“If you’re 35 or 40 years old, you’re pretty established in your career, you have skills that you know cannot yet be disrupted by AI,” Matt Schulman, founder and CEO of Pave, told Fortune last year. “There’s still a lot of human judgment when you’re operating at the more senior level…If you’re a 22-year-old that used to be an Excel junkie or something, then that can be disrupted. So it’s almost a tale of two cities.”