Between AI dynamics and stable services
Europe's labor market will look different in 2025. While public service sectors such as healthcare, education and administration will continue to grow, traditional growth drivers such as the ICT sector will noticeably lose momentum.
In Switzerland, the increase in employment in the second quarter of 2025 was only 0.6 %. The long-term average is 1.3 %. Germany is stagnating, France is even recording a decline, only Italy and the United Kingdom are still showing growth, albeit below the norm. In Switzerland, the service sectors are affected differently. While the healthcare and education sectors are experiencing robust growth, the ICT sector is down 1.4% and has lost almost 3,000 jobs
ICT weakens
The ICT sector has been a growth driver for years. Currently, a combination of productivity gains through artificial intelligence, automation and economic restraint is causing a noticeable slowdown. Routine tasks are being automated and the demand for traditional software developers is falling. Junior positions in particular are coming under pressure as a result of the use of AI. Tasks are being completed faster and with fewer staff, and entry-level opportunities are becoming rarer. In contrast, specialized roles for cloud architecture, machine learning and cybersecurity remain scarce and in demand
After some above-average growth in ICT in recent years, a correction phase can be observed, which is also accompanied by a shift in job profiles.
Government-related services remain stable
The picture is different for healthcare, education and public administration. These government-related sectors continue to grow steadily, in some cases even above average. They are driven by three factors.
- Demographics: Ageing societies, retirements and a shortage of skilled workers are increasing the need for care, support and education.
- Political initiatives: Programs and wage incentives specifically promote new hires, for example in care or early childhood education, and ensure employment growth.
- Productivity limit: Many activities in the education and social sector can hardly be automated, the need for personnel remains constantly high (“Baumol effect”)
Specialization is in demand
The labour market remains dual. Growth continues in government-related sectors, driven by social and political trends. In the ICT sector, demand remains fundamentally present, but is shifting more towards specialized and higher-skilled roles. Investments in the cloud, AI and cyber security will be key job drivers in the long term. However, there will be no broad-based increase in employment. Those who focus specifically on the skills of the future will remain successful in the changing job market.
After strong years, 2025 marks a turning point in Switzerland and Europe. Declines in the ICT sector, robust growth in government services. The dualization of labour market trends will continue to intensify. Specialized skills and all services related to healthcare, education and administration have a bright future.