Could AI be accelerating slowdown in the UK job market?

Ask ChatGPT whether artificial intelligence is contributing to Britain’s cooling jobs market and the chatbot acknowledges its own role, but adds: « Yes, AI is contributing to job losses in the UK, but its impact is nuanced and varies by industry, skill level, and job function ».

The telecoms company BT has said advances in AI could lead it to cut more jobs, having already outlined plans to shed up to 55,000 workers two years ago, as a result of investment in digital automation. Amazon has warned white-collar staff that their jobs could be replaced, Ocado has cut hundreds of roles to reduce costs while using AI instead, and Microsoft is shedding 9,000 jobs worldwide.

Despite these high-profile changes, most economists reckon that, so far, Britain’s slowing labour market has little to do with accelerating investment in AI.

Business groups complain that hiring has been made more costly by a £25bn rise in employer national insurance contributions, introduced in April, and a 6.7 per cent increase in the national living wage.

Such conditions could tempt employers to turn to AI. Rising wage bills could encourage companies to invest in technology as an alternative to hiring humans. The retailer Next has said it does not expect to cut jobs, but plans to use more mechanisation in its warehouses and shops.

Some sectors are braced for a bigger change than others. Research by KPMG suggests jobs in writing and translation, programming, IT-user support, public relations, graphic design. Already AI-generated adverts, press releases and IT chatbots are proliferating.

There are, however, opportunities. Getting AI to do routine functions could free up workers to do more interesting tasks. While it will destroy jobs, others using the technology will be created. The government is working with tech firms including Amazon, BT, Google, IBM, Microsoft and Sage to train 7.5 million people in AI skills.

(Richard Partington, The Guardian, 23 August 2025)