UK Hiring Slows Amid AI-Driven Job Cuts and Wider Economic Challenges

A report by McKinsey found that UK businesses cut hiring for AI-exposed roles by 38% in Q1 2023 compared to the same period in 2022. This decline is almost twice the rate seen elsewhere. However, the slowdown in hiring is not limited to AI-exposed roles, with overall hiring by British companies tumbling at the fastest pace in nearly two years due to tax rises.

A recent report by McKinsey has revealed a significant decline in hiring for AI-exposed roles in the UK, with a 38% drop in vacancies in Q1 2023 compared to the same period in 2022 [1]. This decline is nearly twice the rate seen in other sectors, indicating a broader impact of AI on the job market. However, the slowdown in hiring is not limited to AI-exposed roles; overall hiring by British companies has been tumbling at the fastest pace in nearly two years due to tax rises [1].

The McKinsey report highlights the vulnerability of certain white-collar jobs, such as financial analysts, marketing managers, and programmers, to AI. These roles are likely to be fundamentally changed by AI, leading to a decrease in demand for these positions. The slowdown in hiring across the board is attributed to a combination of factors, including the impact of the April minimum wage hike and the national insurance increase [1].

The UK government has been actively working to bolster its tech workforce to develop AI tools for the public sector. Meta, one of the world's biggest tech companies, has pledged $1 million to fund a new AI fellowship program [2]. This initiative aims to develop AI tools for high-security use cases and improve the efficiency of government services.

Despite the hiring slowdown, the UK is taking steps to enhance its tech capabilities. The government has also entered into an agreement with Google Cloud to upskill 100,000 civil servants in tech and AI by 2030 [2]. These efforts aim to ensure that the UK remains competitive in the global AI landscape.

In summary, the hiring slowdown in the UK is driven by a combination of factors, including the impact of AI on specific job roles and the broader economic impact of tax rises. However, the UK is taking proactive steps to enhance its tech capabilities and ensure its competitiveness in the global AI market.

References:
[1] https://www.bloomberg.com/news/newsletters/2025-07-14/uk-jobs-most-vulnerable-to-ai-see-vacancies-fall
[2] https://www.euronews.com/next/2025/07/11/meta-to-pay-1-million-to-bolster-uk-governments-ai-workforce