AI Cutting More UK Jobs Than Other Leading Economies

LONDON

Artificial intelligence is reshaping workplaces across the developed world, but new research suggests the United Kingdom is losing jobs to AI at a faster pace than other leading economies, raising fresh concerns about how the country is managing the transition to automation.

Recent findings from a Morgan Stanley survey of companies across major economies show that UK firms adopting AI reported an average net job loss of around 8 percent over the past year, the highest figure among peer nations including the United States, Germany, Japan and Australia . While businesses acknowledged significant productivity gains from AI tools, those gains have not translated into job creation at the same scale seen elsewhere.

The research indicates that British companies using AI for more than 12 months have tended to cut roles or leave positions unfilled, rather than redeploy workers into new functions. In contrast, firms in the US and parts of Europe have been more likely to offset automation with new hiring, particularly in technical and specialist roles .

At the heart of the issue is the structure of the UK labour market. Analysts say Britain has a high concentration of white-collar and administrative jobs that are especially exposed to automation, from back-office functions to entry-level professional roles. As AI systems become capable of handling routine analysis, reporting and customer interaction, many of these positions are being reduced or eliminated .

The impact is already visible in official data. Job vacancies in AI-exposed sectors have fallen sharply since late 2022, while overall hiring across the economy has slowed. Employers facing higher costs and weak growth have increasingly turned to automation as a way to protect margins, accelerating the pace of job losses .

Workers are feeling the strain. Surveys cited in the report show rising anxiety about job security, particularly among younger employees and those with two to five years of experience. These roles, often seen as stepping stones into long-term careers, are among the most vulnerable as companies streamline operations using AI tools .

Despite the job cuts, productivity gains from AI adoption in the UK remain strong. British firms reported average efficiency improvements of more than 11 percent, broadly in line with global peers. However, experts warn that without complementary investment in skills and training, these gains risk coming at the cost of long-term employment stability .

Comparisons with other economies highlight the challenge. In the United States, AI adoption has been accompanied by continued hiring in areas such as data science, software development and AI oversight. Germany and Japan, meanwhile, have placed greater emphasis on retraining workers and integrating automation alongside existing roles, limiting net job losses .

UK policymakers are under growing pressure to respond. Economists argue that faster investment in reskilling, clearer workforce transition plans and incentives for job creation in emerging tech sectors will be essential if Britain is to avoid falling further behind. Without intervention, they warn, AI could deepen labour market inequalities and leave large parts of the workforce struggling to adapt.

For now, the data paints a stark picture. While artificial intelligence is boosting productivity across the board, the UK is paying a higher price in lost jobs than its peers, raising difficult questions about how the benefits of technological change are being shared and who is being left behind as the AI revolution accelerates.

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