New research shows young people in the UK are being pushed out of high-paying sectors like tech and finance. It adds hard numbers to a jobless crisis that has been building quietly for Generation Z.
The numbers behind the squeeze
Start with tech. Payroll jobs for 18-24-year-olds in the sector are down approximately 30% over the last three years, through late 2025.
Narrow it to IT professionals specifically, and employment among 16-24-year-olds fell by roughly 20% between 2022 and 2025.
Entry-level software engineering hiring dropped 27% in a single year. Tech graduate positions fell 46% year-on-year.
Overall graduate hiring is down 8%, the first decline since 2020.
Finance and professional services are telling a similar story. Finance roles for 18-24-year-olds have also fallen sharply, and the Big Four accounting firms are trimming their pipelines.
KPMG has cut its graduate intake by 29%. Deloitte has reduced its intake by 18%.
A wider youth employment problem
The Institute for Fiscal Studies reports the share of young people in payrolled employment fell by 4.3 percentage points from late 2022 to the end of 2025, equating to about 330,000 people.
The NEET rate, which tracks young people not in education, employment, or training, is now reaching 12-13%, putting the number approaching 1 million young people.
Why it’s happening
The Office for National Statistics and Morgan Stanley both point to AI automating routine tasks as a contributing factor. Rising employer costs and general hiring constraints are also in the mix.
Morgan Stanley’s research suggests UK firms have seen an 8% reduction in staff attributed to AI by 2025. The bank found the effect less pronounced in other global markets.
Job adverts in AI-exposed occupations are down 15%.
Cyclical slump or permanent shift
Part of it is a reaction to cyclical economic pressure. The other part looks like a longer-term transformation driven by AI.
Youth employment took heavy hits during the 2008 financial crisis and the COVID-19 pandemic. The difference this time is that the trigger is not a sudden shock but a gradual rewiring of what entry-level work actually involves.
What this means
For policymakers, the data puts pressure on how the UK approaches training and education. If AI is absorbing the routine tasks that once taught young workers their trade, universities, employers, and government have not yet agreed on who designs a new on-ramp.
Watch the next rounds of graduate intake figures from the large accounting and banking firms, along with ONS payroll data for the 16-24 age group. If those numbers keep sliding even as the broader economy steadies, it will be hard to call this a cyclical blip.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.