Artificial intelligence is reshaping the UK job market, but the benefits are not reaching everyone equally. Employers are increasingly hiring experienced professionals with AI-related skills while cutting recruitment across many other occupations, reported Bloomberg citing data from job search platform Indeed.
The figures show that overall job vacancies in Britain were about 10% lower this month than they were in January 2025. However, the decline does not tell the full story. Employers are creating more opportunities for senior workers with AI expertise while reducing hiring in sectors where technology can replace or reduce routine work, reported Bloomberg.
The trend points to what economists describe as a “two-speed” labour market, where demand is growing for a small group of highly skilled workers even as recruitment slows across many traditional occupations.
Which jobs are benefiting from AI?
Software development has emerged as one of the strongest-performing sectors after facing heavy job losses over the past few years. Job postings for software developers have risen by 14%, with much of the increase linked to senior positions and roles directly connected to artificial intelligence, reported Bloomberg.
Other technical professions have also remained relatively resilient. Hiring in IT and engineering has held up better than many industries because AI is helping experienced employees become more productive by taking over repetitive tasks rather than replacing them, reported Bloomberg.
Jack Kennedy, senior economist at Indeed, said employers are concentrating their hiring on experienced professionals. “The UK labor market is increasingly splitting into two speeds,” Kennedy told Bloomberg. “Demand is concentrating around experienced workers and roles directly connected to AI, rather than flowing evenly through the profession,” he added.
The report also says many of the new jobs require specialist AI knowledge or years of experience. That makes them difficult to access for first-time job seekers, people returning to work or those looking to switch careers.
Which sectors are losing jobs?
While AI-related hiring has improved in some areas, many industries continue to face weaker demand.
Vacancies have dropped sharply across retail, manufacturing and several white-collar professions such as accounting and marketing, where AI can automate parts of the work, reported Bloomberg. Employers are also responding to higher employment costs and broader economic uncertainty by slowing recruitment.
Manufacturing has experienced one of the biggest declines. Job postings in the sector are down 58% compared with June 2022 and remain 18% below last summer’s levels, reported Bloomberg.
Other blue-collar occupations, including installation and maintenance, loading and stocking, and construction, have also struggled to recover.
The shift has created fresh challenges for younger workers entering the labour market. Youth unemployment in Britain has reached its highest level in more than a decade, reported Bloomberg.
Bank of England Governor Andrew Bailey has described the situation as a “low hire, low fire” economy, where employers recruit fewer workers while also making relatively few layoffs.
Kennedy said the changing labour market is making it harder for newcomers to secure jobs.
“For jobseekers, particularly those at the start of their careers, the bar is therefore rising as the stronger areas of the market increasingly require either specialist AI capability or substantial experience,” he told Bloomberg.
The findings also raise questions about the UK’s skills strategy. Prime Minister Andy Burnham has encouraged more young people to pursue technical qualifications, arguing that practical skills remain valuable even as AI becomes more capable.
In a social media video cited by Bloomberg, Burnham said, “AI may be able to write an essay, but it can’t make a train.”