Workers in their 50s gain ground in tech as youth unemployment rises

"It makes more sense to give generative AI tools to workers in their 50s who already have experience and know how to get things done, rather than hiring entry-level workers in their 20s who cost hundreds of thousands to millions of won just to train after joining." — an industry official

The fortunes of workers in their 20s and those in their 50s are diverging sharply in the IT and professional, scientific and technology services job market. As AI spreads, demand for junior-level workers handling routine tasks has declined, while employers are increasingly favoring experienced workers who can leverage AI and design workflows on their own.

According to a Ministry of Statistics analysis of microdata from the economically active population survey released Wednesday, the average monthly number of employed workers in the IT and professional, scientific and technology services sectors stood at 2,519,800 in the first quarter of this year — down 107,800, or 4.1 percent, from the same period last year.

The decline was concentrated among workers in their 20s. In the two sectors combined, employment among that age group fell from 480,400 in the first quarter of last year to 404,200 in the first quarter of this year, a drop of 76,200. That accounts for 70.7 percent of the total decline of 107,800. The 25-to-29 age bracket — where new graduates and early-career workers are concentrated — alone shed 63,100 jobs.

Workers in their 50s, by contrast, saw gains. Combined employment in the two sectors for that age group rose from 398,800 to 417,500, an increase of 18,700. Workers aged 60 and older also edged up, from 177,300 to 180,300, a gain of 3,000. The figures have fueled the view that AI is not reducing employment evenly across the board, but is instead narrowing the door for entry-level and junior hires first.

The share of young workers in total employment in these sectors has also declined. Workers in their 20s made up 18.3 percent of all employed in the IT and professional, scientific and technology services industries in the first quarter of last year; that share fell to 16.0 percent in the first quarter of this year, a drop of 2.3 percentage points. Over the same period, the share of workers aged 50 and older rose from 21.9 percent to 23.7 percent.

By sector, the professional, scientific and technology services industry posted a steeper decline. Employment there fell from 1,475,900 in the first quarter of last year to 1,387,900 in the first quarter of this year, a drop of 88,000. IT sector employment fell by 19,800 over the same period, from 1,151,700 to 1,131,900.

Industry insiders say AI is reshaping hiring structures. In the past, companies maintained steady demand for junior workers who built experience through repetitive tasks. Recently, however, AI has begun to replace or assist with much of that early-career work — document drafting, coding support, data organization and research. Companies now have a stronger incentive to favor experienced workers who can handle a greater volume of work using AI tools, rather than hiring and training entry-level staff.

"Generative AI can now handle most of what a new hire would do, so frankly there is little reason for a company to take on an entry-level employee who costs hundreds of thousands to millions of won in training alone in the first year," an industry official said. "That money is better spent hiring one senior developer."

Meanwhile, as the job market tightens, movement among existing IT workers has also slowed. During the COVID-19 pandemic, developers and platform workers frequently changed jobs to command higher salaries, but the trend has since shifted toward stability over job-hopping.

Corporate disclosures show that average tenure at major IT companies has been rising. At Naver, average tenure increased from 6.9 years in 2023 to 7.7 years last year, while Kakao's rose from five years to six years and three months. The gaming sector, which has gone through rounds of restructuring and voluntary redundancies, saw similar trends: NCsoft's average tenure grew from 6.5 years to 7.5 years, Krafton's from 2.8 years to 3.2 years, and Netmarble's from 4.9 years to 5.9 years.