Demand for UK tech workers plunges 23% in six months
Key Points
- SThree earned 23% less from placing technology workers in the UK in the six months to 31 May 2026
- The recruiter's total UK fees fell 19% to £11.6 million as vacancies declined across the country
- Employers shifted remaining technology budgets away from software development towards cloud migration and AI roles
- The USA and Japan grew 12% and 36% respectively while every major European market shrank
STEM recruiter SThree earned 23% less from placing technology workers in the UK in the six months to 31 May 2026, blaming softer labour market conditions and lower vacancy levels.
The company, which trades on the London Stock Exchange and places contract and permanent staff across technology, engineering and life sciences roles in 11 countries, reported UK net fees of £11.6 million for the half year, down 19% from £14.2 million a year earlier.
Technology is its core UK discipline, and the 23% drop in fees from those placements gives a direct read on how far employer demand for tech staff has fallen. SThree published the figures in its half-year results on Tuesday (21 July).
The UK slump forms part of a wider European downturn for the recruiter.
Net fees in Germany fell 14%, the Netherlands dropped 24%, Switzerland declined 24% and France fell 15%, with SThree citing subdued business confidence and cautious client sentiment across the continent.
Group net fees came in at £147.7 million, down 7% year on year, while profit before tax collapsed 75% to £2.7 million after £6.4 million of one off restructuring costs.
The picture looks very different outside Europe. Net fees in the USA rose 12%, driven by demand for engineering and technology skills tied to power generation, data centres and energy infrastructure serving AI workloads, while Japan surged 36% on the back of client investment in digital transformation and data security.
SThree cut average headcount 15% across the group during the period, and its remaining consultants each handled more placements as a result.
The recruiter also flagged a change in what UK and European employers now pay for within technology. Demand has moved away from software development and towards migrating ERP systems to the public cloud and filling roles across the AI value chain, meaning traditional coding skills face the sharpest squeeze while cloud and AI specialists hold their value.
Timo Lehne, Chief Executive Officer of SThree, said trading momentum improved through the half despite continued macroeconomic and geopolitical uncertainty, pointing to growth in the company’s contractor order book, which rose 3% to £157.2 million, its first increase since early 2023.
The company maintained its full year profit guidance of around £10 million and held its interim dividend at 5.1 pence per share.
It expects German government infrastructure and defence spending to lift European hiring from 2027 onwards, offering little near term relief to UK tech workers competing for a shrinking pool of roles.
