- AI is creating a two-speed jobs market in the UK as demand shifts to senior talent, according to new figures from Indeed.
- British firms posted about 10% fewer vacancies this month than in January 2025, indicating a significant shift in the job market.
- The fall in vacancies disguises wide disparities as firms increasingly adopt AI to cut costs and boost productivity.
- Software developers are back in demand with postings rising 14%, largely for senior roles linked to AI.
- Occupations such as IT and engineering have held up since last summer, as AI enhances the value of experience.
- In contrast, vacancies in retail and manufacturing have fallen by double digits as employers cope with higher costs.
- Jack Kennedy, senior economist at Indeed, stated that the UK labor market is increasingly splitting into two speeds.
- Kennedy noted that demand is concentrating around experienced workers and roles directly connected to AI.
- The nature of the jobs being created leans toward senior staff with specific technological skills, making them out of reach for many job seekers.
- Youth unemployment in Britain is at its highest in over a decade, a situation exacerbated by a low hire, low fire economy.
Indeed's latest report reveals a bifurcated UK job market, where demand for senior roles with AI expertise is rising, while overall job vacancies have decreased by 10% since January 2025.
The report indicates that software developers are experiencing a resurgence, with job postings increasing by 14%, primarily for senior positions linked to AI.4
Jack Kennedy, senior economist at Indeed, stated, “The UK labor market is increasingly splitting into two speeds.” He emphasized that demand is now focused on experienced workers and roles directly connected to AI, rather than being evenly distributed across professions.7
Conversely, sectors like retail and manufacturing are witnessing significant declines in job postings, with manufacturing roles down 58% since June 2022.
The shift towards AI-centric roles raises concerns for younger jobseekers, as “the bar is therefore rising” for those entering the job market, according to Kennedy.
This trend poses challenges for initiatives aimed at encouraging youth to pursue technical qualifications, as highlighted by Prime Minister Andy Burnham, who noted that while AI can perform certain tasks, it cannot replace the need for skilled labor in manufacturing.
Youth unemployment in Britain has reached its highest level in over a decade, exacerbated by a “low hire, low fire” economy, according to Bank of England Governor Andrew Bailey.
“Software developer postings have risen 14% as AI transforms that profession, while manufacturing vacancies are down 58% since June 2022. Youth unemployment is at its highest in over a decade, which Bank of England Governor Andrew Bailey blames on a “low hire, low fire” economy.”
