AI and Rising Costs Reshape Employment Prospects for UK Graduates

Job Openings for UK Graduates Plunge by 33% as Automation Rises

In a stark reflection of changing economic pressures and rapid technological transformation, the graduate job market in the United Kingdom has reportedly fallen to its lowest level in seven years. According to recent figures from the job search platform Indeed, the number of job postings aimed at university graduates has dropped by 33% compared to the previous year, signalling the most difficult employment landscape for early-career professionals since 2018.

This trend mirrors broader challenges across the labour market, with total job vacancies falling by 5% between late March and mid-June 2025. Analysts attribute this contraction to a combination of higher employer costs, driven by tax increases and the minimum wage changes introduced in April and the accelerating use of artificial intelligence, which is reshaping demand for entry-level roles across industries.

Notably, the UK remains the only major economy among its global peers, including the United States and leading European nations, where job availability has dipped below pre-pandemic levels. Jack Kennedy, senior economist at Indeed, described the trend as a “continued gradual softening” of the labour market rather than an abrupt downturn. While the overall job market appears relatively stable, Kennedy observed that recent graduates face disproportionate difficulty in securing suitable entry-level positions.

The influence of AI on the labour market remains a subject of debate. Research by the Organisation for Economic Co-operation and Development (OECD) warns that white-collar professions such as law, medicine, and software engineering could face disruption. Similarly, the International Monetary Fund estimates that approximately 60% of jobs in advanced economies, including the UK, are exposed to AI, with half of these potentially negatively impacted.

However, alternative perspectives suggest a more balanced outcome. The Tony Blair Institute has proposed that although AI adoption may cause job displacement in the private sector, it could simultaneously generate new roles that compensate for these losses. A spokesperson for the institute remarked that, while initial public reactions to AI tend to be cautious, many users become enthusiastic as they gain experience with the technology, often finding it more approachable and rewarding than expected. They further emphasised that workers across all sectors can adapt by acquiring new skills suited to a changing economy, although those unable to do so risk falling behind, a prospect they described as the most troubling aspect of this transition. Ultimately, the challenge lies in ensuring that innovation enhances opportunity rather than limits it.

Editor’s Note:

The UK stands at a critical juncture in its job market as artificial intelligence (AI) takes on a growing role across industries. Recent data from job site Indeed reveals a troubling 33% drop in graduate job openings over the past year—the steepest decline in seven years. While the figures are sobering, they also serve as a timely reminder of the need for reflection, adaptation, and reinvention. The burden of a progressively weakening job market will fall primarily on recent graduates and entry-level employees. Faced with rising employer taxes and wage changes, many companies are turning to AI to reduce costs, often at the expense of junior roles. As AI continues to reshape sectors ranging from software development to healthcare, the need for adaptability, interdisciplinary thinking, and digital fluency becomes increasingly urgent. In this evolving landscape, universities, employers, and policymakers share the responsibility of creating education systems that are agile and responsive. This includes investing in reskilling programs and ensuring equitable access to lifelong learning opportunities. Graduates must be encouraged to build not only technical skills but also human-centric capabilities such as empathy, communication, ethical reasoning, and creativity that enhance, rather than compete with, technological progress.

Skoobuzz believes that effectively navigating this transition will require strong collaboration between educators, employers, and government leaders. The focus should not be on replacing people with machines, but on using technology to empower individuals to reach their fullest potential.