Labor Market Cools: Unemployment Rises in Services as Companies Slow Hiring Despite Tech Talent Shortage

Data published this week by labor ministries in major European economies confirms a shift in labor market trends. After two years of sustained job growth, the unemployment rate has ticked up slightly in sectors such as professional services, consulting, banking, and information technology.

Companies cite macroeconomic uncertainty, rising labor costs, and caution over a possible recession as the main reasons for slowing down their recruitment processes. However, a paradox persists: while some generalist profiles see fewer job openings, specialized technical positions remain hard to fill.

Sectors Most Affected by the Slowdown

The technology sector, which led job creation during the pandemic and post-pandemic period, has reduced hiring by 15% year-over-year, according to job platform data. Major consulting firms and shared services companies have also paused expansion projects and, in some cases, made workforce adjustments focused on administrative areas.

Banking and finance, hit by the high-interest-rate environment and lower lending activity, have chosen to freeze vacancies and offer voluntary early retirement packages to cut costs. In retail and hospitality, the slowdown in consumption has led to lower demand for temporary and casual workers.

The Tech Talent Gap Persists

Despite the overall slowdown, companies continue to seek professionals in areas such as artificial intelligence, cybersecurity, data analytics, industrial engineering, and renewable energy. The supply of these profiles remains limited, which creates upward wage pressure in very specific segments.

Human resources executives point out that the lack of candidates with the right skills is now the main obstacle to growth, even in a lower net hiring environment. This has led many companies to intensify internal training programs and collaborate with universities and technical colleges.

Wages: Collective Bargaining Lifts Pay, but Variable Bonuses Moderate

Wage increases agreed in collective bargaining agreements average around 3.5%, still above core inflation, thus maintaining workers’ purchasing power. However, companies are moderating variable pay and performance-linked bonuses amid uncertainty over future profits.

In sectors such as consulting and technology, some firms have replaced fixed raises with one‑off payments or improved benefits (health insurance, training, flexible hours) to avoid locking in long‑term cost structures.

Outlook for the Coming Quarters

Labor analysts expect the job market to continue cooling gradually during the second half of 2026, though without reaching the job destruction levels seen in previous crises. The unemployment rate could rise by between half a percentage point and one percentage point over the next twelve months, depending on economic growth.

For workers, the recommendation is to specialize in technical areas and maintain a continuous learning mindset. For companies, the key will be to retain critical talent while adjusting the rest of the workforce based on productivity criteria. The labor market is entering a new phase where job quality becomes more relevant than quantity.

The coming months will be decisive in seeing whether this slowdown stabilizes or, on the contrary, accelerates in the face of a deeper economic contraction. For now, business confidence indicators and hiring expectations point to a soft landing scenario for employment.