AI's appetite for destruction of the jobs market is the biggest story of our times

At the beginning of this year, I saw something in the jobs market I'd never seen before in my 30-plus years in the recruitment business. The economy was growing, yet jobs vacancies were shrinking. This is not normal. Usually when the economy is growing, this goes hand in hand with job creation — but not this time. It's particularly bad in London. The capital has, it was announced last week, the highest jobless rate in the country, hitting an 11-year high.

- BY JAMES REED

I've run Reed, Britain's best-known recruitment company, since 1992. We employ more than 4,500 employees who work across 200 locations around the world. Reed receives 50 million job applications a year, and every year we help fill around 105,000 jobs.

We'd already seen declining job vacancies for several years. It was this in combination with the economic growth (albeit anaemic) that was so startling. According to the ONS, UK GDP grew by 0.7 per cent in the first quarter of this year. Yet in the same quarter the number of UK job vacancies fell by 26,000 (3.2 per cent). Our data now shows that graduate jobs advertised on Reed are down from 180,000 to 55,000 in just a three-year period. Other job sites are reporting similar figures.

In a tricky economic climate, many employers have enacted hiring freezes which have tended to disproportionately impact graduate roles. They are also axing roles that would have gone to grads — recent analysis has shown that nearly half of all jobs lost since July 2024 have been among the under-25s. Overall, youth unemployment is the highest it has been in a decade — 15.3 per cent, not counting the pandemic. The truth is we haven't hit rock bottom yet in terms of decreasing numbers of vacancies — it’s only going to get worse.

AI reduces employers' costs