Harvard Business School and the non-profit business school INSEAD have released a new research paper indicating that AI-native startups are building smaller, flatter teams and significantly reducing hiring of junior employees. This means that the first to be "optimized" in the AI wave are precisely those who have just entered the workforce.

Robot reading a book

AI-native companies: 25% fewer people, 13% more engineers

The study examined Y Combinator startups from 2020 to 2024 and surveyed a wide range of U.S. venture-backed startups that completed their first round of funding during the same period. The paper introduces a new category called "AI-native startups," whose core characteristics involve a shift in two productivity paths: one is the process path, where companies fully integrate AI to help employees complete programming, sales, design, or coordination tasks faster internally; the other is the product path, where AI is directly embedded into the main product, allowing customers to automatically perform tasks that previously required human teams.

Data shows that AI-native startups have teams that are 25% smaller than non-AI-native companies, with about 13% more engineers, while the proportion of junior employees and managers is about 15% lower. In other words, these companies do the same or even more work with fewer people, and middle management has been greatly reduced, leading to a flatter organizational structure. AI tools have replaced a large amount of repetitive and execution-based work, causing tasks that were once handled by junior employees to be absorbed by automated processes.

Senior employee ratio is 20% higher, AI creates an "expert premium"

More notably, AI has not "eliminated" high-level positions as some had predicted, but instead increased the demand for expert-level talent. The study found that the proportion of senior employees in AI-native startups is 20% higher than in non-AI-native companies. This finding challenges the simplistic narrative of "AI replacing everyone": it is the entry-level positions that are being replaced, while experienced and judgmental senior professionals are becoming rarer and more sought after.

This research offers a sobering commentary on current employment anxieties. For recent graduates, the doors of AI-native companies are narrowing; while for those who have spent years in the industry and possess irreplaceable experience, the AI era actually opens a higher value ceiling. Future workplace competition may no longer be a "battle between humans and AI," but rather a division between "experts who can use AI" and "newcomers who cannot."