AI job cuts hit UK hardest with 8% net losses as workers fear displacement across industries

AI Job Cuts Are Landing Hardest in Britain, Morgan Stanley Says

The UK is losing more jobs than it's creating because of artificial intelligence -- and at a faster rate than its international peers. That's according to research by Morgan Stanley that found the significant benefits to firms adopting the technology are coming at a particularly heavy cost to workers in Britain, weighing on an already cooling labor market. British companies reported that AI led to 8% net job losses over the past 12 months, the study shared with Bloomberg shows. It was the highest level in a group that included German, American, Japanese and Australian firms, and twice the international average. The report surveyed firms that have been using AI for at least a year, in five industries exposed to the technology -- consumer staples and retail, real estate, transport, health-care equipment and automobiles. For many of them, tech investments are already paying off. UK companies saw an average 11.5% productivity increase thanks to AI, with almost half reporting even greater boosts. But their US counterparts, which reported virtually the same productivity gains, created more jobs than they slashed due to AI. In the UK, the AI revolution comes just as employers are struggling with payroll costs, slow growth and greater political instability. Firms are cutting jobs at the fastest pace since 2020 and unemployment is at a near five-year high, according to the latest official statistics, as large minimum-wage rises and an increase in national insurance contributions continue to impact staffing plans. Get the Business of Food newsletter. Get the Business of Food newsletter. Get the Business of Food newsletter. How the world feeds itself in a changing economy and climate, from farming to supply chains to consumer trends. How the world feeds itself in a changing economy and climate, from farming to supply chains to consumer trends. How the world feeds itself in a changing economy and climate, from farming to supply chains to consumer trends. Bloomberg may send me offers and promotions. Plus Signed UpPlus Sign UpPlus Sign Up By submitting my information, I agree to the Privacy Policy and Terms of Service. While job postings are declining across the board, UK firms are scaling back occupations that are likely to be affected by AI, like software developers or consultants, at a faster pace, according to a Bloomberg analysis of online vacancies figures from the Office for National Statistics. Since 2022 when OpenAI's ChatGPT was launched, vacancies for such jobs have dropped 37%, compared to a 26% decline elsewhere. "The rising costs of employing staff is driving a growing number of smaller businesses to use AI and outsourcing solutions to fulfill roles traditionally filled by local people who are now missing out on these opportunities," said Justin Moy, managing director at EHF Mortgages in Chelmsford, northeast of London. The Morgan Stanley report showed that AI led employers in the UK to cut or refrain from backfilling around a fourth of their roles, similar to peers in other countries. Yet UK firms were significantly less likely to step up hiring as a result of the technology. AI has the potential to rescue Britain's economy from its sluggish growth path. The possibilities have been highlighted by the Bank of England and the Office for Budget Responsibility, with the fiscal watchdog estimating the technology could lift productivity growth by as much as 0.8 percentage points within the next decade -- a boost that would improve living standards and the public finances. For now, however, the focus is on how AI is worsening the UK's jobs crisis, particularly for young people and white-collar workers. Official figures published last week showed vacancies across the economy have fallen by more than a third since 2022 -- the equivalent of half a million roles. A fifth of that decline was driven by some of the sectors most likely to be impacted by AI, such as professional, scientific and technical activities, administrative services, and IT. The UK's youngest workers are being squeezed from both sides, as AI disrupts entry-level white-collar roles while Labour's tax policies weigh on hiring in retail and hospitality. Youth unemployment has risen faster than the overall rate, reaching 13.7% in the three months through November, the highest since 2020. BOE Governor Andrew Bailey says AI is emerging as the next "general purpose technology" akin to growth-driving waves of innovation in the past, such as computers and the internet. However, he warned last month that the UK needs to be ready for AI-driven job displacements. He also cautioned that the technology could impact the talent pipeline that helps workers move up into more senior roles. Employers surveyed by Morgan Stanley for the report said they were most likely to cut early-career jobs requiring two to five years of experience in the UK. One of its authors, London-based Head of EMEA Sustainability Research Rachel Fletcher, said the findings provide an "early warning sign" of how AI is disrupting the labor market. The technology's impact on employment has "come up in a lot of our recent investor conversations," she added.

More than a quarter of Britons say they fear losing jobs to AI in next five years

Survey reveals 'mismatched AI expectations' between views of employers and staff over impact on careers More than a quarter (27%) of UK workers are worried their jobs could disappear in the next five years as a result of AI, according to a survey of thousands of employees. Two-thirds (66%) of UK employers reported having invested in AI in the past 12 months, according to the international recruitment company Randstad's annual review of the world of work, while more than half (56%) of workers said more companies were encouraging the use of AI tools in the workplace. This was leading to "mismatched AI expectations" between the views of employees and their employers over the impact of AI on jobs, according to Randstad's poll of 27,000 workers and 1,225 organisations across 35 countries. Just under half (45%) of UK office workers surveyed believed AI would benefit companies more than employees. Younger workers, particularly those belonging to gen Z - born between 1997 and 2012 - were the most concerned about the impact of AI and their ability to adapt, while baby boomers - born in the postwar years between 1946 and 1964 and nearing the end of their careers - showed greater self-assurance. Higher levels of concern expressed by young people entering the workforce could stem from the decision of many business leaders, highlighted by separate research, to invest in AI to plug skills gaps through automation instead of training up new hires. This is adding to the challenges facing younger workers at a time when the labour market is cooling. Increased use of AI and automation in businesses is increasingly replacing "low-complexity, transactional roles", the survey showed, which could help to address labour shortages in certain industries through boosting productivity. About half (55%) of UK workers surveyed said AI had made a positive impact on their productivity, a view echoed by employers. "AI is not a rival to labour; it should be seen as key to augmenting tasks and highlighting the importance of roles that only people can do," said Sander van 't Noordende, the chief executive of Randstad. "We must close the 'AI reality gap'. While businesses race to embrace a new way of working, our data shows that one in five talent believe AI will have a limited impact on their tasks and nearly half perceive it as more beneficial to the company than themselves. This leaves them vulnerable in both their careers and the value they can add to organisations." The pace of adoption of AI in the workplace is also having an impact on workers around the world. Four in five workers believe AI will affect their daily work tasks, while the survey found that job vacancies requiring "AI agent" skills had risen by 1,587% over the past year. Jamie Dimon, the boss of the US bank JP Morgan, told an audience at the World Economic Forum in Davos this week that governments and businesses would have to step in to help workers whose roles were displaced by the technology, or risk "civil unrest".

AI-driven job cuts accelerate globally as UK becomes early warning By Invezz

Invezz.com - "I was doing Dry January for the trend and health benefits, but now that I have been laid off, I think this is more of a financial necessity," joked London-based Callum Hill, recently cut by one of the UK's fintech majors. The line lands lightly, but it captures a deeper shift rippling through labour markets: artificial intelligence is no longer a future threat debated in boardrooms. It is reshaping corporate workforces in real time, accelerating job cuts across technology, finance, media and manufacturing, even as executives tout productivity gains and investors reward efficiency. From London to Seattle, companies are increasingly explicit about the role AI is playing in shrinking payrolls, offering an early glimpse of how the labour market may adjust to one of the fastest technological shifts in modern history. The scale and speed of change are beginning to show up in data. New research from Morgan Stanley suggests Britain is already experiencing sharper job losses from AI adoption than other major economies, a development the bank describes as an "early warning sign" for global labour markets. At the same time, high-profile layoffs at Amazon, Meta, UPS, Citigroup, and other companies underscore how AI is becoming both a strategic priority and a convenient explanation for workforce reductions. Britain as an early stress testMorgan Stanley's research surveyed companies that have used AI for at least a year across five sectors exposed to automation: consumer staples and retail, real estate, transport, healthcare equipment and automobiles. British companies reported an average productivity boost of 11.5% from AI, broadly in line with peers in the US, Germany, Japan and Australia. What distinguishes the UK is the employment outcome. British firms reported net job losses of 8% over the past year, the highest rate among the countries surveyed and roughly double the international average. US firms, by contrast, reported similar productivity gains while creating more jobs than they cut. The data suggest that while AI is prompting companies globally to cut or freeze around a quarter of roles, British employers are significantly less likely to step up hiring elsewhere. The result is a sharper net decline in employment, particularly in early-career roles requiring two to five years of experience. Rachel Fletcher, one of the report's authors, said the findings had emerged repeatedly in recent investor discussions. She described them as an early signal of how AI could disrupt labour markets more broadly as adoption spreads. Costs, policy and the UK squeezeAI's impact in Britain is unfolding against a difficult economic backdrop. Employers are contending with higher taxes, rising employer national insurance contributions and increases in the minimum wage imposed by Labour. Official figures show companies are cutting jobs at the fastest rate in six years, while unemployment is near a five-year high. Vacancies have fallen by more than a third since 2022, equivalent to around 500,000 roles, according to the Office for National Statistics. About a fifth of that decline has come from sectors likely to be affected by AI, including IT, professional and administrative services, and science. The interaction between automation and higher costs may help explain why productivity gains are not translating into new hiring. Rather than redeploying workers into new roles, firms appear to be banking efficiency gains to offset rising expenses, amplifying job losses in the short term. Corporate America leans into efficiencyThe pattern is not confined to Britain. Across the US, companies are increasingly linking workforce reductions to AI-driven efficiency. Amazon has announced plans to cut 16,000 corporate jobs, with the latest round affecting roles across Amazon Web Services, retail, Prime Video and human resources. An internal email drafted by senior vice president Colleen Aubrey, and briefly circulated by mistake, described the cuts as part of a long-running effort to reduce layers, increase ownership and remove bureaucracy. Amazon is far from alone. United Parcel Service is moving ahead with a sweeping restructuring that could eliminate as many as 30,000 jobs this year, highlighting the mounting costs of its split from Amazon as competition intensifies in the US delivery market. Microsoft cut around 15,000 roles during 2025, after chief executive Satya Nadella said that AI was writing 20% to 30% of the company's code. Salesforce's Marc Benioff has said AI agents now handle roughly half of customer interactions, allowing the company to reduce its customer support workforce from about 9,000 to 5,000. At IBM, chief executive Arvind Krishna confirmed that AI chatbots had replaced several hundred HR roles, even as overall employment increased in other areas. Klarna's Sebastian Siemiatkowski has been more blunt, saying the fintech cut around 40% of its workforce as AI took over tasks once performed by humans. Finance, media and industry follow suitThe wave of AI-linked cuts is spreading beyond Silicon Valley. Citigroup is eliminating about 1,000 jobs this week as part of a broader plan to cut 20,000 roles by the end of 2026. The bank has cited efficiencies gained through technology alongside its strategic overhaul under chief executive Jane Fraser. BlackRock, the world's largest asset manager, is cutting about 250 jobs as it reshapes its business following its acquisition of private credit specialist HPS Investment Partners. Meta Platforms is preparing to lay off around 10% of employees in its Reality Labs division, redirecting resources toward artificial intelligence as competition intensifies. In Europe, chipmaking equipment giant ASML is cutting 1,700 jobs, mostly in R&D leadership, even as demand from AI-focused customers drives record orders. Pinterest plans to trim less than 15% of its workforce as it reallocates resources toward AI-focused roles, though investor reaction has been cautious. Morgan Stanley estimates that more than 200,000 European banking jobs could disappear by 2030 as lenders automate back-office, risk management and compliance functions. The projected efficiency gains of up to 30% are enticing for executives, but the social consequences are becoming harder to ignore. Workers grow anxiousSurveys suggest anxiety among workers is rising faster than layoffs alone would imply. A Randstad survey found more than a quarter of UK workers fear their jobs could disappear completely within the next five years due to AI, with concern highest among younger workers. A Mercer Global Talent Trends report showed 40% of employees worldwide feared losing their jobs to AI, up from 28% in 2024. In the US, consulting firm Challenger, Gray & Christmas attributed nearly 55,000 layoffs in 2025 to AI. A Massachusetts Institute of Technology study found AI could already perform tasks covering 11.7% of the US labour market, potentially saving $1.2 trillion in wages across finance, healthcare and professional services. At the same time, some economists caution against overstating AI's immediate impact. Yale University's Budget Lab found little evidence of widespread AI-driven job losses in US labour market data between 2022 and 2025, suggesting that many companies may be using AI as a narrative cover for cuts driven by other factors. Warnings from AI's creatorsFew voices have been louder on the risks than Anthropic chief executive Dario Amodei. He has warned that AI could destroy half of all white-collar jobs, triggering what he calls an "unusually painful" labour market shock. In a lengthy essay, Amodei argued that AI's cognitive breadth allows it to act as a general substitute for human labour across multiple industries simultaneously. Unlike past technological revolutions, he wrote, AI's speed and scope could overwhelm societies' ability to adapt. He called for government intervention, including progressive taxation of AI firms, to manage the transition. Others in the industry disagree. Nvidia chief executive Jensen Huang has said AI will create high-paying jobs in construction, manufacturing and infrastructure, including building chip factories and data centres. JPMorgan's Jamie Dimon has argued governments should focus on retraining and local support to help workers transition. Politics catches upThe debate is increasingly political. In the UK, Prime Minister Sir Keir Starmer has made AI central to his vision of national renewal, betting that the technology can drive growth and competitiveness. The Morgan Stanley findings complicate that narrative, suggesting the near-term adjustment may be harsher than anticipated. London mayor Sadiq Khan has warned AI could destroy swathes of jobs in the capital, while policymakers across Europe and the US grapple with how to regulate AI without stifling innovation. The risk is that labour markets adjust faster than social safety nets or retraining systems can respond. A turning point for workWhat emerges from the data and corporate disclosures is not a single story of technological progress or destruction, but a complex transition marked by uneven outcomes. AI is delivering real productivity gains, but those gains are not being shared evenly across workers, sectors or countries. Britain's experience suggests that cost pressures and policy choices can amplify AI's disruptive effects, turning efficiency into job losses rather than redeployment. In the US, stronger growth and more flexible labour markets appear to be cushioning the blow, at least for now. For companies, AI offers a powerful lever to cut costs and boost margins. For workers, it introduces uncertainty at a pace few have experienced before. And for governments, it poses a test of whether policy can keep up with technology that is reshaping work faster than institutions can adapt. The question is no longer whether AI will change the labour market, but how painful that transition will be -- and who will bear the cost.