Is AI Driving the UK Tech Graduate Job Crisis?

AI‑pocalypse

According to data from the Institute of Student Employers (ISE), the UK technology sector is sharply reducing graduate hiring, with a 46% drop projected for 2025 and an additional 53% expected thereafter.

The primary culprit is artificial intelligence, which is now performing many entry‑level tasks previously done by graduates, such as routine coding, data analysis, and basic digital work. Companies still need technical talent but are opting for experienced or hands‑on staff rather than training newcomers.

ISE’s overall figures show graduate recruitment down 8% year‑over‑year—the first decline since the pandemic‑induced 12% drop in 2020. The tech and pharmaceutical industries are hit hardest.

ISE co‑CEO Stephen Isherwood warned that, as some commentators feared, AI has already replaced many young graduates.

"For students and young people this is a tough market. Labor mobility is low and young people are suffering," he said.

Despite this, IT, digital, and AI roles remain the most sought‑after, with 46% of firms aiming to hire for these high‑skill positions.

Ironically, AI has not yet penetrated graduate recruitment processes. While over half of employers use automation to manage certain aspects of assessments, AI adoption remains rare—only 15% use AI in gamified talent evaluations, though this may rise as applicants increasingly employ technology.

Employers are also guarding against AI‑assisted cheating: 79% are redesigning or reviewing hiring procedures due to AI developments, though 15% have not observed or suspected cheating.

The tech sector appears to be “self‑inflicting” the damage. Companies such as Salesforce and Workday have announced thousands of layoffs while deploying AI, and Microsoft plans to cut 10,000 jobs and adopt new AI technologies.

This trend creates a vicious cycle: graduates struggle to secure their first experience‑building role, which will further reduce the pool of mid‑level professionals over the next five years.

If the survey is accurate, AI is closing the doors to tech careers faster than anticipated, sacrificing long‑term talent pipelines for short‑term efficiency gains.

Should AI be viewed as the next generation of computing or as a new industrial revolution? The answer remains unsettled.