UK Tech Hiring Crunch: Visa Applications Fall Despite AI Push – City A.M.
The UK tech sector is facing a growing challenge as applications from overseas workers have declined, even as the government attempts to position the nation as a global hub for artificial intelligence. New data reveals a concerning trend that could exacerbate existing talent shortages within one of the UK’s fastest-growing industries.
Decline in Tech Visa Applications
According to data released by accountancy firm RSM UK, the number of international workers applying for UK visas to work in the tech industry decreased by 11 percent, falling from 8,739 in the second quarter of last year to 7,768 in the third. This decline extends beyond the most recent quarter, with applications also six percent lower than the same period in the previous year, when 8,233 applications were recorded.
Government Initiatives Clash with Reality
This downturn in visa applications occurs alongside recent government efforts to attract skilled workers, particularly in the field of AI. AI minister Kanishka Narayan recently announced a new ‘talent stream’ that will reimburse visa fees and expedite processing for international AI professionals. These initiatives are part of a broader strategy to establish the UK as a leader in AI and related technologies.
Industry Concerns
James Bull, a senior analyst at RSM specializing in the tech industry, stated that tech businesses are “being hit with both a decline in skilled immigration and existing talent shortages.” He further emphasized that a lack of future-proof skills could hinder the growth and innovation of the UK tech sector. RSM’s latest tech outlook also revealed that 22 percent of UK tech leaders identify employee engagement as their biggest workforce challenge, followed by the cost of homegrown talent (19 percent) and the need to upskill non-tech staff (17 percent).
The situation is further complicated by a growing trend of British entrepreneurs choosing to relocate abroad. Analysis from Rathbones indicates that 5,940 business owners left the UK between January 2024 and January 2026, with the UAE, Spain, and the US being the most popular destinations.
Rising Demand for AI Skills
Despite the challenges, demand for AI skills continues to rise. The British Chambers of Commerce recently reported that 71 percent of British firms are investing in AI technology in 2025, while 40 percent of small businesses acknowledge a lack of internal skills to effectively implement these technologies. While overall job vacancies have decreased for 27 consecutive months, starting salaries for specialist IT and AI roles are increasing at their fastest rate in nearly 18 months.
Frequently Asked Questions
What is the current trend in tech visa applications?
The number of international workers applying for UK visas to work in tech decreased by 11 percent from the second to the third quarter of last year, falling to 7,768 applications.
What is the government doing to address the talent shortage?
The government has announced plans to reimburse visa fees and fast-track processing for AI talent, as well as create a ‘global talent taskforce’ to support high-growth sectors.
What are the biggest workforce challenges facing UK tech companies?
According to RSM’s latest tech outlook, the biggest workforce hurdles are employee engagement (22 percent), the cost of homegrown talent (19 percent), and upskilling non-tech staff (17 percent).
As the UK strives to become a global AI leader, will the government’s initiatives be enough to counteract the declining number of visa applications and retain the talent needed to drive innovation?