UK tech hit by double trouble: Fewer foreign techies amid skills squeeze
The Register
February 24, 2026
AI-Generated Deep Dive Summary
The UK tech industry is grappling with a dual challenge: a decline in skilled immigration and persistent domestic talent shortages, according to a report by RSM UK. Visa applications from international workers in the sector dropped 11% between Q2 and Q3 2025, marking a 6% year-on-year decrease. Additionally, domestic staff are either costly or difficult to upskill, further straining the industry. The report highlights that while AI is being widely adopted by tech companies, it serves as both a driver of growth and a source of job displacement. Over 98% of surveyed executives reported using AI, with many attributing recent layoffs (26% of companies) to automation replacing roles.
Despite its benefits, AI's impact on employment remains mixed. While some studies show limited discernible effects on productivity or jobs, RSM’s data indicates that 51% of job cuts are linked to AI augmentation or replacement, compared to 23% tied to economic conditions. This dichotomy underscores the complex role of AI in reshaping the workforce. Meanwhile, tech companies are calling for better incentives to boost investment in British AI and greater emphasis on skilled immigration to address talent gaps.
The report also reveals that nearly a quarter of respondents believe direct government funding and initiatives addressing skills shortages would be critical solutions. James Bull, RSM’s technology industry senior analyst, emphasizes that the workforce is likely to remain one of the UK tech sector’s biggest challenges in the year ahead. This issue is compounded by broader concerns about economic competitiveness, tax pressures, and the allure of other jurisdictions, as evidenced by a study showing 6,000 business owners leaving the UK over the past two years—many from the tech sector—with the UAE, Spain, and the US as top destinations.
For readers interested in tech, this highlights the critical need for balanced AI adoption to avoid workforce disruption while maximizing productivity gains. The UK’s ability to retain and attract skilled talent will be pivotal in determining its global tech competitiveness moving forward.
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Originally published on The Register on 2/24/2026