Technology startups raise concern after unsure labor and immigration policies following Brexit this past Friday. The transition which could last as long as the end of the year follow U.K employers after already tight labor market for technology workers.

Many companies are taking cautious approach.

Andrius Sutas, chief executive and co-founder of AimBrain Solutions Ltd., said job seekers have brought up concerns about Brexit and the U.K.-based artificial intelligence startup’s contingency plans.

“Some of the potential candidates even dropped out of our hiring process, as a U.K. company, when they received competing job offers from an EU entity,” Mr. Sutas said.

British software giant Micro Focus International PLC has created a working committee to monitor Brexit developments as they unfold, said Tom Goguen, the company’s chief product officer.

“The company will act accordingly with progressions in the plan,” Mr. Goguen said, adding that Micro Focus doesn’t expect potential regulatory changes to “significantly impact” its business.

AI startups in the U.K. received about $3.2 billion in venture-capital funding in 2019, an increase of 23% from $2.6 billion in 2018, according to a study released this month by the research firm Dealroom and Tech Nation, an organization that supports U.K. technology entrepreneurs.

Demand is especially high for information technology security and management workers, followed by technical IT support, operations and management.

“The businesses we work with are seeing demand for digitalization, greater priority on cybersecurity risks and increased customer expectations,” said Craig Freedberg, a London-based associate director at Robert Half.

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Cyber Security skills of U.K could degrade even more

Brexit, once the transition period is over, will mean that the UK tech sector will hire less employees from outside the country due to stricter border regulations. According to Ippolito Forni, threat intelligence analyst at EclecticIQ, this could mean that the cyber security skills gap in the UK could widen.

“Global demand for cybersecurity experts has already outpaced supply, and Britain’s exit from the European Union is set to be a further barrier to talent acquisition,” he said. “Limiting entry to the country means limiting our pool of thought, and diversity is key to successful cybersecurity teams.

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