Are Side Hustles the Solution to the Shrinking Entry-Level Job Pool?

According to a study by Bloomberg and Revelio Labs, the number of entry-level job postings in the US shrank by over 35% between January 2023 and June 2025. Similarly, a 2025 Stanford study found that while employment has grown, job growth for young workers (ages 22–25) has stalled since late 2022.1

The evidence suggests this is because of AI. Highly AI-exposed roles (e.g., coding, marketing, and customer support) declined the most. 2

Why AI has killed more entry-level jobs

Throughout this period, the demand for senior talent, even in AI-exposed fields, has remained fairly strong.2

According to the Stanford study, entry-level workers are bearing the brunt of the AI revolution because companies traditionally hire them to do work that consists of structured, easily teachable tasks, such as writing basic code, summarizing research, drafting copy, or organizing datasets.

Generative AI now excels at automating all of these tasks.

By contrast, senior workers’ tasks often require trickier decision-making, such as knowing how to navigate client dynamics, read a room, and troubleshoot unstructured problems.1

Since AI can’t replicate these skills yet, higher-level jobs are safer from being cut—at least for now.

Growing pains in a world with advanced AI

Daniel Zhao, Chief Economist at Glassdoor, doesn’t think AI will fully eliminate entry-level jobs. To the contrary, he believes younger, early-career workers actually may benefit the most from AI in the long run.

Young workers usually adapt to change the fastest because they have higher tech literacy and less attachment to skills that may be outdated, he told Side Hustles.

However, he noted that during this initial adjustment period, companies may continue favoring experienced workers.

LinkedIn’s Chief Economic Opportunity Officer, Aneesh Raman, echoed this in a 2025 article for The New York Times. When technological and economic disruption hit, the career ladder’s bottom rung is usually the first to break, he wrote.

An April 2026 article from The Guardian suggested that the bleak entry-level job pool was pushing Gen Zers to start side hustles or become entrepreneurs. It featured several young workers who, after struggling to get hired, created their own jobs.

Side Hustles followed up with one, Suhit Agarwal, a 2025 University of Southern California graduate who applied to Google over six times without getting an interview.

Agarwal clarified that these applications were spaced out throughout his college years (which included a gap year) and the year after his graduation. Still, he said he was incredulous at never hearing back given his experience as a founder at multiple software startups and his solid references.

He told us that many of his friends in the engineering fraternity Theta Tau, which had recruiting connections with major firms like IBM and PwC, also had trouble landing the positions they’d been expecting after graduating.

Agarwal’s story isn’t fully representative of the broader Gen Z experience—jobs at prestigious companies like Google have always been intensely competitive. However, his experience of hitting unexpected walls has been shared by millions of other young workers in the past few years.

Building momentum in a stalled market

In late 2025, LinkedIn’s Workforce Confidence Index indicated that Gen Zers were the most pessimistic about their job prospects of any age group.

This, again, is why Agarwal decided to forge his own path. He chose to do it with the exact tool he believed had made it harder to get the job he wanted: AI.

Agarwal joined a new startup called trufflepig as a founding engineer. The team had developed an AI-powered spreadsheet tool meant for financial executives at smaller firms. Initially, it supported just about 100 of Excel’s 450+ standard formulas, so Agarwal took it upon himself to expand the library.

With the help of AI, he single-handedly wrote nearly 300 formulas from scratch in two weeks, pushing the total past 380. He later leveraged this experience to land a job with Accordance, a San Francisco-based AI company.

Non-traditional career paths, such as launching an independent side hustle or taking on freelance work, offer a way for workers to gain skills and experience when corporate roles fall short, Zhao said.

He added that successful freelance businesses or side projects can be just as meaningful (and as eye-catching on a resume) as internships.

Agarwal told us he agreed with that. He believes most hiring managers prioritize proof of skill and efficient execution above traditional credentials.

Using his technical role as an example, he said the key is to show that work you delivered is “ironclad and won’t be touched for a year to come.”

The rise of independent and contract work

According to Upwork’s 2025 Future Workforce Index study, up to 53% of Gen Z workers have started freelancing or taking on contract work. That’s nearly double the average (28%) across the broader skilled workforce.

These young workers are using client projects to learn faster, wrote Upwork’s former managing director Kelly Monahan in a Fast Company article. “They pitch clients, negotiate contracts, deliver outcomes, and adapt in real time,” essentially doing a crash course in entrepreneurship while also earning money.

Monahan wrote that doing independent work allows young workers to bypass traditional recruitment hurdles. She said this isn’t necessarily a “second best” option; in fact, going solo may make it possible to “develop business, communication, and leadership skills at a much faster pace than many entry-level roles allow.” 3

The difficulty of showcasing freelance experience on your resume

Zhao noted that while non-traditional work does carry weight, candidates may need to explain in more detail what they learned to prospective employers.

“Recruiters may know off-hand the rigor of internships at specific companies, but they can’t know how well freelance experience will translate unless applicants explain it,” he said.

Whether you’re freelancing for clients or running a self-directed side business, be specific on your resume. This means:

• Listing the exact tools you used
• Spelling out the scope of your projects
• Quantifying the results you delivered

College offers a window to experiment, gain practical skills, and grow your network before high-stakes career decisions kick in.

Agarwal suggested that college students should take advantage of this period to start interesting side projects that will bring them visibility on social media, which he said is a good way to get noticed by recruiters these days.

If you can get lots of eyeballs on a social media post, you may receive DMs from companies with opportunities, Agarwal said. It’s more efficient than “reaching out to a bunch of people and not really hearing back.”

This may be particularly true in industries that value a disruptive approach, such as tech. Agarwal pointed to newer companies like Figma, noting that they actively monitor social platforms for creative thinkers. A team may reach out on X over something as simple as a hand-sketched feature request, he said.

Should young workers still apply to traditional internships?

Despite the fierce competition, landing traditional corporate internships is still a way to learn skills and build relationships. It’s just not the only path to building a career, and getting rejected isn’t the end of the world, as Agarwal learned.

Agarwal himself plans to stick with Accordance for the foreseeable future, but his eventual goal is to start his own company. He already has a few ideas brewing, including an AI-powered consumer document app and a plug-and-play editing suite for businesses.

Ultimately, while side hustles and freelance projects may not offer the predictable trajectory traditional corporate roles once did, they give early-career professionals the agency to take charge of their careers even when standard hiring pipelines stall.

In today’s market, the real risk may not be taking an independent route, but waiting for permission to get started.