Employers across the UK are increasingly concerned that artificial intelligence will reshape the workforce, with new research revealing that one in six expect staff numbers to fall in the next year due to AI adoption. The Chartered Institute of Personnel and Development (CIPD), which surveyed more than 2,000 employers, found that clerical, junior managerial, professional, and administrative roles are seen as most vulnerable to automation.
The impact appears greatest among large private sector companies, where 26 per cent of employers anticipate reductions in headcount. This compares with 17 per cent in the private sector overall and 20 per cent in the public sector. The findings highlight the growing influence of AI on the labour market, which has already seen slower hiring following rising employment costs in last year’s budget.
Major corporations are already acting on AI-driven efficiencies. Amazon announced it would cut 14,000 corporate positions, with vice-president Beth Galetti describing generative AI as “the most transformative technology” since the internet. Professional services firm PwC also reduced its global workforce by 5,600, marking its first reduction since the financial crisis in 2010, while investing nearly $1.5 billion in expanding its AI capabilities.
Recruiters report that employers are weighing new hiring against the need to improve efficiency through AI and automation. Research by ManpowerGroup, covering more than 40,000 companies in 42 countries, identified the UK as facing one of the steepest recruitment slowdowns globally in the final quarter, citing cost pressures, AI disruption, and policy uncertainty ahead of the budget.
The CIPD called on the government to support workers in roles most exposed to AI, particularly early-career employees and those in lower-level professional positions across finance, IT, insurance, and administrative services. James Cockett, senior labour market economist at the CIPD, said AI has “great potential for improving productivity and performance, but it also risks leaving many people behind,” stressing the need for national retraining and upskilling programs for workers at all career stages.
Among employers expecting staff reductions due to AI, 26 per cent anticipate losing more than 10 per cent of their workforce. Overall, the net employment balance, measuring the difference between firms expecting staff increases versus decreases, remains slightly positive at +9, though the public sector balance has declined.
A government spokesperson emphasized efforts to equip workers with AI skills, including partnerships with leading tech firms to train a fifth of the workforce and £187 million in digital and AI learning initiatives. The government’s AI growth zones are also intended to generate thousands of new jobs and skills opportunities, aiming to ensure that the benefits of AI are widely shared across the UK.
