The number of international workers applying for a visa to work in the UK’s tech sector dropped 11 percent between Q2 and Q3 2025, and was down 6 percent year-on-year, according to consultancy RSM UK.
At the same time, domestic talent is expensive and non-technical staff are proving difficult to upskill.
These findings come from RSM’s Technology Industry Outlook 2026 report, based on interviews with 300 tech executives.
Almost all surveyed – 98 percent – are using AI, which RSM describes as a double-edged sword: a driver of growth and investment on one hand, and the primary reason tech workers are losing their jobs on the other.
The claim about AI sits awkwardly alongside other research. A recent study from the National Bureau of Economic Research found that more than 80 percent of companies have seen no discernible impact from AI on either employment or productivity.
RSM’s own numbers are mixed on the point. AI is a source of confidence with 82 percent of respondents at AI companies expecting to grow under the current UK government, and it sits at the heart of both new product development and operational improvements. Yet more than a quarter of all respondents said they had cut headcount in the past year, with 51 percent citing roles augmented or replaced by AI as the main reason, compared to just 23 percent who blamed economic conditions.
On what would help, 20 percent called for better incentives to encourage financial investment in British AI, while nearly as many said greater skilled immigration was essential, a notable ask given the political temperature around the issue.
Around 16 percent in each case wanted direct government funding for AI companies and government-backed initiatives to address skills gaps.
“Tech businesses are being hit with both a decline in skilled immigration and existing talent shortages. Workforce is likely to be one of the biggest challenges for the UK tech industry in the year ahead,” said RSM technology industry senior analyst James Bull.
“Employers are having to grapple with AI – adopt it too quickly and there’s a risk of damaging employee engagement, but adopt it too slowly, and businesses could lose out on increased productivity and growth opportunities,” he added.
A separate study by investment management biz Rathbones Group claims 6,000 business owners have already left the UK over the past two years, with the largest proportion coming from the tech sector.
Data from Companies House, the official registrar of UK firms, shows that 8,423 companies saw one of their owners leave the country. Rathbones claims the United Arab Emirates was the primary destination for those leaving Britain, with Spain in second, and the US in third place.
Concerns about economic competitiveness, tax pressures and the attractiveness of other jurisdictions were given as reasons, so perhaps it is largely AI companies that are confident they will grow under the current UK government. ®