Investing.com — Artificial intelligence (AI) is creating a two-speed labour market in the United Kingdom, as employers continue to hire experienced technology workers while cutting vacancies in retail, manufacturing, and a number of white-collar professions, Bloomberg reported, citing data from Indeed.
UK companies posted around 10% fewer job vacancies in July compared with January 2025, reflecting rising employment costs and broader economic uncertainty.
However, the overall decline masks sharp differences across professions. Vacancies in software development rose by 14%, with much of the growth concentrated in senior positions and roles directly linked to AI.
Hiring also remained relatively resilient in information technology and engineering, where AI tools can take over routine tasks and increase the productivity of experienced employees.
Vacancies in retail and manufacturing have fallen by double digits. White-collar professions that are more vulnerable to AI substitution, including accounting and marketing, have also recorded significant declines.
Manufacturing job postings were down 58% from June 2022 and 18% below their level in the summer of last year. Vacancies in construction, installation, maintenance, loading and unloading, and warehousing have also yet to recover.
This shift indicates that companies are using AI to reduce costs and automate entry-level or repetitive tasks, while competing for workers who are able to apply the technology effectively.
The trend is creating a more challenging environment for recent graduates, people returning to the workforce, and workers seeking to change careers. Many of the stronger areas of the labour market now require specific AI knowledge or substantial professional experience.
The trend could also complicate Prime Minister Andy Burnham’s plans to encourage more young people to pursue technical qualifications. Training alone may not be sufficient to provide access to roles where employers also require years of experience.
Youth unemployment in the UK has reached its highest level in more than a decade. Bank of England Governor Andrew Bailey has described the country as having a “low-hire, low-fire” economy, in which businesses retain existing staff but remain reluctant to recruit new employees.
Persistently weak entry-level hiring could widen the experience gap and leave fewer pathways into the sectors benefiting most from AI adoption.
Source from Investing.com
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