The United Kingdom is experiencing the highest rate of AI-related job losses among major economies at 8% net decline, double the international average, particularly affecting young workers and white-collar positions despite similar productivity gains to other nations.
British companies have cut 8% more jobs than they created due to artificial intelligence adoption over the past year, the highest rate among developed economies and double the international average, according to Morgan Stanley research. The findings show UK firms achieved an average productivity boost of 11.5% from AI—virtually identical to US companies—yet American employers created jobs while British firms slashed positions, with vacancies for AI-vulnerable roles like software developers dropping 37% since ChatGPT’s 2022 launch.
The AI-driven workforce reduction compounds Britain’s existing labor challenges, as unemployment reaches a near five-year high and youth joblessness climbs to 13.7%, the highest since 2020. “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 of EHF Mortgages, while Bank of England Governor Andrew Bailey warned the country must prepare for AI-driven job displacements that could disrupt the talent pipeline for senior positions.