Workers walk in the rain across London Bridge, with Tower Bridge seen behind, in London. — Reuters
LONDON: The United Kingdom is losing more jobs than it’s creating because of artificial intelligence (AI) – 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 labour 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, healthcare 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 United Kingdom, 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.
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 fallen 37%, compared to a 26% drop 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 United Kingdom 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. — Bloomberg
