One in six (17 per cent) of UK employers expect artificial intelligence to reduce their headcount over the next 12 months, with junior and administrative roles most at risk, according to the CIPD’s latest Labour Market Outlook.
The report, which surveyed over 2,000 employers, found that 62 per cent of those cutting jobs believe clerical, junior managerial, professional, or administrator roles are most likely to be lost due to AI.
This comes as overall hiring confidence remains at an “unprecedented low outside of the pandemic”. The metric, which measures the difference between employers planning to increase staff and those planning to cut them, remained stable at +9.
The outlook is worse in the public sector, where the balance fell from -6 to -8. This negative figure means more public sector employers plan to cut staff than to hire. The non-compulsory education sector, including universities, saw the sharpest fall, dropping from -4 to -15, as many institutions face a financial crisis.
Retrain and upskill
“AI is transforming the way many people work and has great potential for improving productivity and performance, but it also risks leaving many people behind,” said James Cockett, senior labour market economist at the CIPD. “Junior roles stand to be most affected by AI, but we need a national drive to retrain and upskill people of all ages and career stages.”
The risk of AI-driven job cuts is highest in large private sector organisations, where 26 per cent expect headcount to fall. This compares to 20 per cent in the public sector and 17 per cent in the private sector overall. Among all employers reducing headcount due to AI, a quarter (26 per cent) anticipate shedding more than 10 per cent of their workforce.
Pay expectations remain steady, with the median expected basic pay increase at three per cent for the sixth consecutive quarter. However, the report notes that large pay rises are less common. Only 21 per cent of employers plan rises of 5 per cent or more, down from 34 per cent 12 months ago.
