AI results in eight per cent in net job losses in UK over last year
Research conducted by investment bank Morgan Stanley found that while AI is boosting productivity, it is also causing more job cuts than creation in the UK, affecting the labor market more severely than in the United States, Japan, or Germany. The study surveyed companies that have been using AI for at least a year across five sectors: consumer staples and retail, real estate, transport, healthcare equipment, and automotive.
The results showed that British companies reported an average 11.5% productivity increase due to AI adoption. In contrast, US firms reported similar productivity gains but were able to create more jobs than they eliminated, highlighting a stark difference in how AI is impacting employment across economies.
The study also noted that British workers are being disproportionately affected, with early-career positions—requiring two to five years of experience—most likely to be cut. Higher labor costs and taxation pressures were cited as additional factors amplifying the negative impact on the UK job market.
Analysts warn that while AI offers significant efficiency and innovation benefits, the UK may face mounting challenges in ensuring workforce adaptation, reskilling, and equitable distribution of technology-driven gains.
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