Job market hit by an ‘AI doom loop’, as trust hits an all time low

A growing dependence on AI tools is reshaping the job hunt — and not in ways that leave anyone satisfied. Job seekers feel shut out, recruiters feel overwhelmed, and both sides are losing faith in the process.

A new report suggests the cycle is spiraling, creating what one industry leader calls an “AI doom loop.”

Trust breaking down

Daniel Chait, CEO of hiring platform Greenhouse, explained that AI has made applying for jobs easier than ever, but landing one harder than it’s been in years. Employers face a crush of nearly indistinguishable applications, while candidates feel they’re sending résumés into a void.

“This is the first time I can remember where both sides were unhappy,” he told the outlet. He said the core frustration is simple: companies are drowning in applicants, and job seekers aren’t getting traction.

The 2025 Greenhouse AI in Hiring Report found that only 8% of U.S. applicants believe AI-led screening improves fairness. Nearly half say their trust in hiring has fallen over the past year — a figure that jumps to 62% among Gen Z workers entering the job market.

Among those reporting declining trust, 42% link the problem directly to AI. Many also fear that algorithmic systems may simply be shifting human bias into automated form.

The ‘AI doom loop’

Even as skepticism grows, applicants are leaning more heavily on automation. Greenhouse reports that nearly half of job seekers are submitting more applications than last year, a dynamic Chait calls the “AI doom loop.”

The New York Times has reported that LinkedIn now sees over 11,000 applications per minute, with submissions up more than 45% year-over-year. Greenhouse’s data shows three in four applicants use AI to refine or generate materials, yet 87% want employers to disclose when they rely on AI.

But the tools candidates use to stand out may be doing the opposite. Chait told Fortune that AI-generated résumés and cover letters end up sounding strikingly similar, making it harder for hiring teams to distinguish real talent.

“You end up basically not being able to tell anyone apart,” he said.

Fatigue and frustration

Paddy Lambros, CEO of Dex, an AI career agent platform, told Fortune that the new wave of applicant behavior is a reaction to years of poor hiring experiences. He said job seekers increasingly try to bypass automated filters with tricks shared on social media — from résumé hacks to AI-written scripts.

“If you feel like every application you send is kind of a meaningless thing that no one’s going to read anyway, then sure, why wouldn’t you use AI to kind of spam it out?” he said.

But he cautioned that such tactics rarely carry candidates beyond the first screening. At his previous role with VC firm Atomico, Lambros watched application volumes balloon four- or five-fold in a matter of weeks — most of them AI-generated, generic and lacking meaningful detail.

Greenhouse’s report found that 65% of U.S. hiring managers have spotted deceptive AI use, from prompt-laced résumés designed to override filters to candidates reading answers word-for-word from chatbot scripts, and even cases involving deepfakes.

At the same time, hiring teams say fraud concerns are rising. Seventy-four percent of managers report feeling more wary than they were a year ago.

Gaming the system

Prompt injections — hidden text added to cheat screening tools — have become common in certain fields. Greenhouse found that 41% of U.S. job seekers admit to using them, and more than half of the rest say they are considering it. The practice is most prevalent in IT and finance.

Meanwhile, AI-led interviews are spreading. Many candidates say they feel dismissed when the first round doesn’t involve a human.

“AI usage in first-round interviews is downright insulting and inhumane,” Lambros said. “To be told it’s not worth sending a human to speak to you is a pretty poor signal.”

Bringing balance back

Despite the problems, both Chait and Lambros believe AI can be constructive when used appropriately. Lambros said the technology can help match candidates with roles that genuinely align with their skills and goals, acting more like a career coach than a résumé generator.

“I think that that’s really the future of hiring. It’s less about pipelines, and it’s more about highly accurate matchmaking,” he said.

Chait argues that the industry must find ways to restore the human element. To him, the next step is rethinking how job postings, applications and screening processes convey meaningful intent.

“The solution has to come from better ways to bring out the real interest and the real meaning behind job applications and job postings,” he told Fortune.

Sources: Fortune, The New York Times

This article is made and published by Asger Risom, who may have used AI in the preparation