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UK Firms Eye AI Job Cuts as Youth Unemployment Hits Decade High

Deloitte Survey: Over Half of Large UK Companies Deploy AI to Replace Humans Within a Year, Youth Unemployment Reaches a High in More Than a Decade

More than half of large UK companies are preparing to replace human workers with artificial intelligence in the coming year, according to a Deloitte survey of chief financial officers (CFOs) released Wednesday and reported by Bloomberg. The findings land as youth unemployment climbs to its highest level in over a decade.

The Numbers Behind the Shift

Deloitte polled 66 CFOs between September 17 and October 1, including 12 from the FTSE 100 and 25 from the FTSE 250. 52% expect to use AI to cut staff. Perhaps more striking: 67% admitted that AI has so far delivered only a quarter of what they expected. The technology is still in its early stages, yet the knife is already raised.

The report adds weight to a trend some economists call "growth without employment." Companies are adopting AI while facing high hiring costs, so they aren't expanding their payrolls. The result? Long-term unemployment is rising, and the youth unemployment rate has hit a new high in more than a decade. The irony is hard to miss: this is happening in an economy growing significantly faster than its European counterparts.

Minister Promises No One Left Behind, But Profits Remain Unclear

The situation poses a challenge for the Labour government led by Prime Minister Andy Burnham and puts AI minister Kanishka Narayan in the hot seat. In a speech on Monday, he promised, "We will never let ordinary workers bear the cost of the AI revolution alone," acknowledging public fears about jobs and the next generation's future.

But while companies use AI to cut costs, they can't say whether the investment will pay off. Only one-third of CFOs believe AI will boost profitability in the coming year. Meanwhile, a report this week from London training platform Multiverse, founded by Euan Blair, highlights a core problem: companies keep buying AI tools but barely train employees to use them. "Very few companies know what their employees can actually do with AI," leading to wasted investment. Technology can be purchased, but capability is lacking—and that may be the real worry for the UK workforce.

Key Points

  • 52% of surveyed CFOs expect to use AI to reduce headcount within a year.
  • 67% say AI has delivered only a quarter of expected results so far.
  • Youth unemployment has reached its highest level in over a decade amid "growth without employment."
  • Only one-third of CFOs expect AI to improve profitability in the next year.
  • Training gap: Firms invest in AI tools but rarely teach staff how to use them, risking wasted spending.