UK Tech Sector Faces Severe Hiring Crunch as AI Visa Applications Plummet
New data reveals a troubling contradiction in the UK's technology sector: while the government aggressively promotes the country as a global artificial intelligence hub with special visa incentives, applications from overseas tech workers have dropped significantly. This decline exacerbates existing talent shortages in one of the economy's fastest-growing industries.
Sharp Decline in Skilled Immigration
Accountancy firm RSM UK has released figures showing the number of international workers applying for UK tech visas fell by 11 percent from 8,739 in the second quarter of last year to just 7,768 in the third quarter. This represents a six percent decrease compared to the same period the previous year, when 8,233 applications were recorded.
James Bull, senior tech industry analyst at RSM, emphasized the severity of the situation: "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."
Bull further warned that "tech businesses are facing a lack of future-proof skills, which risks hindering growth and innovation" at a critical moment for the sector.
Government AI Push Meets Reality Check
The declining visa applications directly contradict recent government initiatives designed to attract international talent. AI Minister Kanishka Narayan recently announced at the London AI Hub that a dedicated AI 'talent stream' would reimburse visa fees and accelerate processing for skilled international workers.
This promise forms part of broader commitments in the UK's industrial strategy to establish a 'global talent taskforce' supporting high-growth sectors including artificial intelligence and cybersecurity. However, the effectiveness of these measures appears questionable given the current application trends.
Broader Workforce Challenges Emerge
RSM's latest tech outlook survey reveals additional workforce pressures beyond immigration issues. Twenty-two percent of UK tech leaders identified employee engagement as their primary workforce challenge, followed closely by the cost of homegrown talent at 19 percent and upskilling non-tech staff at 17 percent.
"The war on talent is a real issue in the tech industry," Bull added. "Individuals with the 'right' specialist skills are few and far between, and businesses are struggling to upskill their existing staff fast enough."
Entrepreneur Exodus Compounds Problems
The talent attraction challenges coincide with concerning mobility trends showing British entrepreneurs leaving the country. Rathbones analysis published this week found that 5,940 business owners departed the UK between January 2024 and January 2026, with software among the most affected sectors.
The United Arab Emirates, Spain, and the United States emerged as the most popular destinations for these departing entrepreneurs. Michelle White, head of private office at Rathbones Group, noted the findings reflect a "clear shift" in where UK entrepreneurs choose to base themselves.
Growing AI Skills Gap
Meanwhile, demand for artificial intelligence expertise continues to surge. The British Chambers of Commerce recently reported that 71 percent of British firms invested in AI technology during 2025, while 40 percent of small businesses admitted lacking the internal skills necessary to deploy these technologies effectively.
Although overall vacancies have declined for 27 consecutive months, starting salaries for specialist IT and AI roles are increasing at their fastest rate in nearly 18 months, indicating intense competition for limited talent.
Industry Leaders Call for Balanced Approach
Carolyn Dawson, chief executive of Founders Forum Group, has previously warned that the UK risks falling behind in the global AI race without a "two-pronged approach" combining global talent attraction with homegrown skills development.
This comprehensive view suggests that while visa initiatives represent one component of addressing the talent shortage, they must be complemented by substantial investment in domestic education, training, and retention strategies to ensure the UK tech sector's long-term competitiveness.
