University graduates in the UK are facing the toughest job market since 2018, figures suggest, as employers pause hiring and use AI to cut costs according to analysts.
The number of roles advertised for recent graduates is down 33% compared with last year and is at the lowest level in seven years, according to the job search site Indeed.
Overall job postings as of mid-June were 5% lower compared with the end of March, as the broader job market struggles in the face of higher taxes for employers and minimum wage changes introduced from April.
It means the UK is an outlier compared with the US and its peers in Europe, as it is the only economy with fewer job openings available than before the pandemic, according to the data. Jack Kennedy, a senior economist at Indeed, said the figures underlined a “continued gradual softening rather than a nosedive” in the labour market.
“Despite the UK labour market holding out overall, new entrants like graduates face a challenging time in securing a first rung on the ladder,” Kennedy said. “This signals a wider landscape of employers holding on to existing staff, while some observers contend that entry-level roles in professional occupations are particularly exposed to AI displacement.”
Callout
There are varying forecasts about the impact of AI on the labour market. Research from the Organisation for Economic Co-operation and Development has found the technology could disrupt “white-collar” professions such as lawyers, doctors and software engineers. The International Monetary Fund has estimated that 60% of jobs in advanced economies such as the US and UK are exposed to AI, and that half of these jobs may be negatively affected.
The Tony Blair Institute has said potential UK job losses in the private sector could be mitigated by AI creating new roles.
This month the technology secretary, Peter Kyle, called on workers and businesses to “act now” on getting to grips with AI, or risk being left behind.
He said: “I think most people are approaching this with trepidation. Once they start [using AI], it turns to exhilaration, because it is a lot more straightforward than people realise, and it is far more rewarding than people expect.
“There’s no one in employment at the moment that is incapable of gaining the skills that will be needed in the economy in the next five years … That is the optimistic way of saying: act now, and you will thrive into the future. Don’t, and I think that some people will be left behind. And that’s what worries me the most.”
• This article was amended on 26 June 2025 to clarify that the link between AI and the decline in graduate jobs is something suggested by analysts, rather than documented by figures.
