One in six UK employers expect job cuts from AI in next year

One in six UK employers expect artificial intelligence to reduce the size of their workforce over the next 12 months, according to a major new study warning of growing disruption in managerial recruitment.

Research by the Chartered Institute of Personnel and Development (CIPD) found that 62% of those anticipating job losses believe clerical, junior management, professional or managerial roles will be the first to disappear as automation accelerates.

The findings, released ahead of this month’s Budget, are based on the CIPD’s latest Labor Market Outlook – a survey of more than 2,000 employers – and highlight the growing tension between AI-led productivity gains and the threat to early-career jobs.

The impact is expected to be more pronounced among large private sector companies, where more than a quarter of employers (26%) expect to reduce headcount as AI takes over. This compares to 17 percent in the private sector as a whole and 20 percent in the public sector.

The warning comes as companies weigh the adoption of AI against higher recruitment costs and sluggish growth since last year’s Budget. Global technical and professional services groups have already begun to restructure.

Amazon said last month it would cut 14,000 jobs at the company, citing generative artificial intelligence as the most transformative technology since the internet, while PricewaterhouseCoopers cut its global workforce by 5,600 in the last fiscal year — its first major cut since the 2008 financial crisis — despite spending nearly $1.5 billion to expand its AI capabilities.

Recruiters say employers are becoming more cautious about hiring, as they look to balance cost control with efficiency gains from automation.

Separate research by ManpowerGroup, which tracks hiring plans in 42 countries, found that the UK is facing one of the steepest hiring slowdowns globally, hit by what it called “a perfect storm of cost pressures, AI disruption, and policy uncertainty.”

The CIPD said the government should ensure that workers most exposed to AI – particularly those working in early career or lower-level professional roles in finance, insurance, IT and administrative services – are supported with retraining and upskilling programmes.

James Cockett, chief labor market economist at the CIPD, said AI offered “huge potential to improve productivity and performance”, but warned that it also risked “leaving too many people behind”.

“Junior roles are the most affected by AI, but we need a national campaign to retrain and upskill people of all ages and career stages,” he said.

Among employers who expect to lay off workers due to AI, a quarter (26%) believe that more than 10% of their workforce could be laid off within one year.

Overall, the net employment balance – the difference between employers that plan to increase headcount and those that plan to reduce headcount – remains modest at +9. In the public sector, confidence fell further into negative territory, falling from -6 to -8.

A government spokesman said ministers were focused on helping workers “take advantage of the huge opportunities presented by artificial intelligence”.

They said: “We are working with leading technology companies to train a fifth of our workforce in AI over the coming years and investing £187 million to bring digital learning and AI teaching directly into classrooms and communities.”

They added that the government’s AI Growth Zones are already creating “thousands of new jobs and skills” across the UK, helping to ensure “working people can share in the benefits of AI”.