AI fuels split UK job market, boosting senior tech roles while cutting other vacancies

UK hiring data shows a growing divide, with experienced AI-savvy workers in demand and vacancies falling sharply in many other sectors.

Data from job portal Indeed indicates that British employers posted roughly 10% fewer vacancies this month compared with January 2025, yet the aggregate drop hides a widening gap in the labour market. Demand is accelerating for senior software engineers and other AI-focused roles, which saw a 14% increase in postings, especially for positions directly tied to artificial intelligence. Conversely, vacancies in sectors like retail, manufacturing and certain white-collar occupations such as accounting and marketing have slumped by double-digit figures as firms seek cost efficiencies.

Roles in IT and engineering that leverage AI to automate routine work have remained relatively stable since last summer. Analysts warn that the surge in senior, tech-heavy jobs may leave many job-seekers, particularly recent graduates and those re-entering the workforce, without viable openings. The pattern challenges Prime Minister Andy Burnham’s push for more young people to pursue technical qualifications and reflects broader concerns about a “low-hire, low-fire” economy highlighted by Bank of England Governor Andrew Bailey.