Marvin OnumonuEmployment confidence fell sharply across all UK sectors, with the latest ManpowerGroup Employment Outlook Survey showing a huge drop in hiring intentions for Q3 2025.
The survey found the net employment outlook was +19% for Q3, down by 12% from the previous quarter as market volatility hit confidence.
For the first time since 2021, employers in communications services fell by 7%, energy and utilities dropped by 3%, and other sectors including government, public sector and education reduced by 8%, showing more plans to cut jobs than hire.
Petra Tagg, director at ManpowerGroup UK, said: “The vast drop this quarter marks a one-off reset that we have been anticipating to the employment market.
“After months of uncertainty, hitting this new low is a symptom of the entire labour market re-aligning after the changes imposed by the National Insurance and Living Wage increases, alongside the recent uncertainties of the US trade tariffs.
“From here, employers will ‘wait and see’ to gauge the volume of the reset rather than making any swift decisions towards the end of the year.”
The most positive intent to hire was reported in IT, which rose by 47%.
Industrials and materials increased by 29%, financials and real estate grew by 28%, and healthcare and life sciences rose by 21%.
Other sectors including consumer goods and services rose by 16%, and transport, logistics and automotive increased by 15%, but these remained below the national average.
Tagg added: “We’ve been anticipating this drop off in hiring plans so that the economy can begin rebuilding.
“Green shoots have already started to pop up, and most notably we’ve seen temporary hiring demand begin to return to our books.
“Businesses are taking a proactive and pragmatic approach to their optimism and seeking to ‘try before they buy’ with temporary staff then converting to permanent when the time is right.”
He said: “It began with warehousing, driving & logistics; temp staffing demands have begun to return – which also tells us that consumer spending is on the rise.”
The main reasons employers gave for changes to staffing included economic challenges, which rose from 36% in Q2 to 64% in Q3.
Market changes reducing demand for some jobs increased from 22% to 55%.
Reorganising or downsizing went up from 20% to 56%, and optimising processes to enhance efficiency, leading to role consolidation, rose from 19% to 59%.
Reducing staff to match current demand went from 18% to 54%, while changes in required skills and jobs tied to finished projects both increased from 16% and 15% respectively in Q2 to 53% and 55% in Q3.
Automation as a reason increased from 10% to 56%.
He added: “The UK Government’s immigration changes and trade policy shifts are fuelling hiring uncertainty. With 64% of employers citing economic challenges as the top barrier to recruitment—almost double Q2—businesses are stretched thin.
“Yet history shows resilience: post-COVID demand eventually bounced back.
“As the economy stabilises, we could see hiring pick up again by year-end, driven by the need to futureproof workforces and diversify talent pipelines despite current constraints.”
