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By Suzanne Blake
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Only 30 percent of recent graduates have secured full-time employment in roles directly related to their fields of study, according to the new 2025 Cengage Group Graduate Employability Report.
Nearly half of graduates also reported feeling unprepared for the job market, based on the survey of 865 full-time hiring managers, 698 post-secondary instructors and 971 recent graduates.
Why It Matters
The Cengage report characterized the 2025 entry-level labor market as the toughest in five years and identified a widening gap between the skills educators taught and the job-specific skills employers sought.
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This is a mismatch that risks prolonging underemployment for degree holders and even affecting earnings trajectories, graduate debt repayment and workforce planning across industries.
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What To Know
The Cengage Group report found that only 30 percent of 2025 graduates had found full-time work in their field, and it reported that nearly half of graduates said they felt unprepared for the workforce.
This reflects a higher-than-normal unemployment or underemployment rate among recent graduates, with graduate unemployment figures hovering at around 5 percent in mid-2025, according to NBC News.
Many graduates have accepted roles outside their fields or delayed their preferred career tracks.
"The job market is moving faster than ever," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
"You can go to school in 2021 for a coding degree, graduate in 2025, and suddenly realize the jobs you trained for are already out of style. The labor market that once felt tight has loosened up—supply of workers is outweighing demand. Add in AI and automation, and those entry-level roles that used to be plentiful are harder to come by."
The Cengage report also found employers and educators described a mismatch between curriculum and real-world job requirements, particularly for job-specific and technical skills.
"Most recent grads are facing a double bind: a degree that's often mismatched to market demand and a job market that's been hollowed out by corporate cost-cutting," HR consultant Bryan Driscoll told Newsweek. "Employers want experience from people who couldn't possibly have it yet, while higher ed keeps churning out graduates without ensuring pathways into stable work."
Artificial intelligence and shifting employer priorities have changed entry-level role expectations, though analysts caution that AI was not the sole driver of weak hiring for recent graduates.
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "This has been one of the most difficult periods for new graduates to land jobs in many fields in years. At the heart of the issue is the rise of two economic factors: AI and uncertainty. AI has been a key disruptor among entry level positions, with some employers feeling if AI services can elevate the quickness and efficiency of many tasks, those same tasks can be moved to current employees."
Thompson told Newsweek: "Right now, wages look like they're going to stagnate, and four-year college enrollment could begin to fall. Costs might eventually follow, though many argue the government's role in funding is what's been keeping tuition high."
Driscoll told Newsweek: "We've normalized underemployment and unpaid internships as rites of passage, which only deepens inequality. The long-term effect is a generation carrying debt, stuck in low-wage jobs, and delaying milestones like homeownership or starting families. That weakens both economic growth and social stability."
What Happens Next
In the long term, the job market will likely move in a cycle, Thompson said, with markets set to tighten and loosen.
"I do think we'll see more jobs lost as companies chase profitability," Thompson said. "If they can be more efficient with fewer people, they will, because at the end of the day they're answering to shareholders."
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