UK employers are creating a two-speed jobs market as artificial intelligence adoption transforms workforce demands, according to new data from job search website Indeed. While British firms posted about 10% fewer vacancies this month compared to January 2025, the decline masks significant disparities in hiring patterns. As reported by Bloomberg, the labor market is increasingly concentrating demand around experienced workers and roles directly connected to AI technology.
Software developers, whose profession has been transformed by AI and suffered dramatic job losses since 2022, are back in demand with postings rising 14% according to Indeed data. Much of this increase came from senior roles and those directly linked to AI technology. The recovery in software development positions represents a significant shift from the sector's challenging period over the past two years.
Occupations such as IT and engineering, where AI enhances the value of experience by taking over routine tasks, are among the few that have held up since last summer. Meanwhile, from retail and manufacturing to white-collar roles that are more vulnerable to substitution like accounting or marketing, vacancies have fallen by double digits as employers take action to cope with higher employment costs and a more volatile economy.
Hiring has slowed steeply for blue-collar occupations, with manufacturing postings down 58% since June 2022 and 18% below where they were last summer. Installation and maintenance, loading and stocking, and construction jobs have also failed to recover. According to Indeed economist Jack Kennedy, the nature of the jobs being created - leaning toward senior staff with specific technological skills - means they will be out of reach for many job seekers.
Youth unemployment in Britain is at its highest in over a decade, a problem Bank of England Governor Andrew Bailey blames on a 'low hire, low fire' economy. As reported by Indeed, the rising bar for job seekers, particularly those at the start of their careers, means that stronger areas of the market increasingly require either specialist AI capability or substantial experience. This trend casts doubt on Prime Minister Andy Burnham's plans to encourage more young people to pursue technical qualifications as a way to future-proof their careers.
