AI job cuts hit Britain hardest with 8% net losses as worker anxiety climbs to 27%

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".