UK Tech Grad Hiring Crashes 46% as GenAI Automates Roles

The UK technology industry is in the midst of a dramatic contraction of its entry-level workforce, with graduate hiring collapsing by a staggering 46% over the past year. This stark figure, detailed in a new report from the Institute of Student Employers (ISE), signals a fundamental shift in how the sector builds its talent pipeline. The primary driver is the rapid adoption of Generative AI, which is automating the foundational coding, data analysis, and digital tasks once reserved for junior employees. This trend reveals a sector aggressively prioritizing short-term, AI-driven efficiency, a strategy that risks creating a critical UK tech talent pipeline crisis in the years to come.

The 46% Plunge: Measuring the Graduate Exodus

The latest data from the Institute of Student Employers (ISE) paints a grim picture for new entrants into the tech workforce. The 46% year-on-year collapse in graduate jobs is not a minor fluctuation but a structural upheaval of the entry-level market. The situation is set to worsen, with the ISE projecting an additional 53% drop in tech graduate vacancies as AI adoption matures, according to figures in its latest report.

While the tech sector’s decline is exceptionally severe, it is part of a wider, albeit less dramatic, downturn. Overall graduate hiring across all UK sectors has fallen by 8%, the first such decline since the 12% drop during the pandemic in 2020. This downturn creates a sharp paradox: while entry-level roles vanish, the demand for advanced skills remains high. The same ISE survey found that IT, digital, and AI positions are the most sought-after by recruiters, with 46% of all organizations looking to hire for these capabilities .

The industry wants the skills but is increasingly unwilling to cultivate them.

When Algorithms Replace Entry Badges

The Institute of Student Employers’ report directly attributes the hiring crash to AI’s capability to perform entry-level work. This isn’t a future possibility; it’s a present reality where current AI tools excel at tasks that have historically formed the bedrock of a junior technologist’s first job. The discussion around whether AI will eliminate entry level tech jobs is moving from theoretical to practical as AI is replacing junior tech roles UK-wide across several key domains.

In software development, AI-powered coding assistants now proficiently handle boilerplate code, unit tests, and minor bug fixes, allowing a single mid-level developer to achieve the output of a small team. In data science, a common entry point involved cleaning data and generating routine reports—tasks now largely automated by AI platforms. Similarly, basic digital operations in marketing and IT support, such as drafting social media posts or categorizing support tickets, are being handed off to AI, reducing the need for junior headcount.

The Talent Hourglass: Emptying the Pipeline

The industry’s pivot toward AI-driven efficiency creates a dangerous long-term consequence: the “vicious cycle.” By cutting off the supply of entry-level roles, companies prevent a generation of talent from gaining the essential on-the-job experience needed to become skilled mid-level professionals. In three to five years, this will likely lead to a severe shortage of qualified engineers and analysts, forcing companies to compete for a shrinking talent pool and driving up wages.

This trend reveals a fascinating paradox in the industry’s behavior. While companies aggressively use AI to replace human labor, the ISE survey found its use in their own graduate recruitment processes to be “very rare.” Only 15% of employers use AI in recruitment, highlighting a selective approach to automation that prioritizes cost-cutting over talent development.