Background: Uganda's expanding higher education sector has produced an unprecedented surge in graduate output at a time when the formal labour market remains structurally incapable of absorbing new entrants, generating acute tensions between graduate expectations forged by decades of credential-based socialization and the realities of an economy dominated by informal, precarious work. Objective: This study examined the employment trajectories of Ugandan university graduates, assessed the sociodemographic and structural predictors of engagement in side hustles, and evaluated the perceived role of academic credentials in securing sustainable livelihood outcomes. Methods: A cross-sectional survey design was employed, drawing a stratified random sample of 412 graduates from five Ugandan universities who had completed their undergraduate or postgraduate programmes within the preceding five years. Data were collected using a pre-tested, self-administered structured questionnaire and were analysed through univariate, bivariate, and binary logistic regression techniques using SPSS version 26. Categoricalassociations were tested using chi-square statistics, while logistic regression identified independent predictors of side hustle engagement at a 95% confidence level. Results: Only 25.7% of graduates were formally employed at the time of the survey, while 39.8% reported primary reliance on side hustles as their main livelihood strategy. Statistically significant associations were found between side hustle engagement and absence of formal employment (χ² = 48.2, p < 0.001), urban residence, and exposure to entrepreneurship training. Binary logistic regression revealed that graduates without formal employment were more than four times as likely to engage in side hustles (OR = 4.21, 95% CI: 2.94–6.03, p < 0.001), while those who received entrepreneurship training were three times as likely to do so (OR = 3.14, 95% CI: 2.21–4.46, p < 0.001). Credential confidence was notably low, with only 22.4% of graduates believing their degree was sufficient to guarantee employment. Conclusion: Ugandan graduates are undergoing a critical epistemic shift — moving away from blind trust in academic credentials towards adaptive livelihood diversification. Policy interventions must urgently realign higher education curricula with labour market realities, expand formal employment pathways, and institutionalize entrepreneurship support structures that transform side hustles from coping mechanisms into viable engines of economic growth.