Artificial intelligence is reshaping Britain’s labour market, creating a widening divide between sectors benefiting from the technology and those experiencing persistent job losses, according to new data reported by Bloomberg.
Figures from employment platform Indeed show that UK employers advertised around 10 per cent fewer vacancies in July than in January 2025, reflecting the combined impact of higher employment costs and continued economic uncertainty.
The overall decline masks stark differences across industries. Demand for software developers increased by 14 per cent, with much of the growth concentrated in senior positions and roles directly linked to artificial intelligence.
Hiring has also remained relatively resilient in information technology and engineering, where AI is helping experienced professionals automate routine tasks and improve productivity.
By contrast, vacancies in retail and manufacturing have fallen sharply. White-collar occupations considered more vulnerable to AI-driven automation, including accounting and marketing, have also recorded significant declines in hiring.
Manufacturing has been particularly affected, with job postings down 58 per cent from their June 2022 peak and 18 per cent below last summer’s level. Recruitment has also remained subdued in construction, installation, maintenance, loading and stocking roles.
The trend suggests that many employers are using AI to reduce operating costs by automating repetitive and entry-level work while increasing demand for experienced professionals capable of deploying and managing the technology.
The shift is creating additional barriers for recent graduates, people re-entering the workforce and those seeking to change careers. Many of the occupations showing stronger demand now require specialised AI expertise or several years of professional experience.
The changing employment landscape could also undermine efforts to encourage more young people to pursue technical education. While skills training remains important, employers are increasingly seeking candidates who combine technical knowledge with practical industry experience.
Youth unemployment in Britain has climbed to its highest level in more than a decade, underscoring the challenges facing new entrants to the labour market.
Bank of England Governor Andrew Bailey has described the UK as a “low hire, low fire” economy, where businesses are retaining existing employees but remain reluctant to expand their workforce.
Analysts warn that continued weakness in entry-level recruitment could deepen the experience gap, limiting opportunities for young workers and reducing the pipeline of talent entering sectors expected to benefit most from the rapid adoption of artificial intelligence.
