Job losses linked to artificial intelligence (AI) are hitting Britain harder than Japan, Germany, Australia, and the US, according to new research from investment bank Morgan Stanley.
The UK is losing more jobs than it is creating due to AI – and much faster than its international peers, the study has found.
British companies reported an average of 8% net decline in jobs over the past year, twice the international average.
While companies in the UK saw their productivity increase on average by 11.5% thanks to AI, similar to their American counterparts, US firms created more jobs than they slashed due to the technology.
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The Morgan Stanley report, shared with Bloomberg, surveyed companies that have used AI for at least 12 months across five industries: consumer staples and retail, real estate, transport, healthcare equipment, and cars.
It showed that UK employers would cut or refrain from backfilling around a quarter of their roles due to AI, a figure similar to other surveyed markets. However, British firms were significantly less likely to step up hiring as a result.
According to the report, employers in the UK were most likely to cut early-career jobs requiring two to five years of experience.
Gloomy picture
The findings add to an already gloomy picture for the British labor market, as higher costs and taxes also weigh on hiring. Firms are cutting jobs at the fastest pace since 2020, as large minimum-wage rises and an increase in national insurance contributions affect staffing plans, according to Bloomberg.
At 5.1%, the unemployment rate is at its highest in almost five years, with young people hit hardest, official data shows.
More than a quarter of Britons said they fear they would lose their job to AI in the next five years, according to the international recruitment company Randstad’s annual poll. Younger workers were the most concerned about the impact of AI and their ability to adapt.
The survey also showed “mismatched AI expectations” between the employers and their employees.
While a number of studies have shown that AI is still incapable of automating the vast majority of roles and is prone to costly mistakes, corporate leaders are pushing for its adoption anyway – and in some cases even gloating about it.
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