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UK Firms Eye AI Job Cuts as Youth Unemployment Soars

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

A new survey from Deloitte paints a stark picture of the UK job market: more than half of large companies are preparing to use artificial intelligence to replace human workers in the coming year. The findings, released Wednesday, come as youth unemployment climbs to its highest level in over a decade.

Deloitte polled 66 chief financial officers (CFOs) between September 17 and October 1, including 12 from FTSE 100 companies and 25 from the FTSE 250. The results show that 52% of CFOs expect to use AI to cut staff. Perhaps more surprising, 67% admitted that AI has so far delivered only a quarter of what they expected—suggesting the technology is still in its early stages, yet the axe is already being raised.

The survey adds weight to a growing trend of "jobless growth": companies are adopting AI and facing high employment costs, so they're not hiring aggressively. The result? Long-term unemployment and a youth unemployment rate not seen in more than a decade. And the irony is that this is happening in an economy growing significantly faster than its European counterparts.

Minister Promises 'Not to Leave Ordinary People Alone'

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 pledged, "We will never let ordinary workers bear the cost of the AI revolution alone," acknowledging public concerns about jobs and the future of the next generation.

But while companies are using AI to cut costs, they're uncertain 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 issue: companies keep pouring money into AI tools but hardly train employees on how to use them. "Very few companies know what their employees can actually do with AI," leading to wasted investments. Technology can be bought, but capability is lacking—and that may be the real worry for the UK workforce.

Key Points:

  • 52% of large UK companies plan to use AI to replace human workers within a year, according to a Deloitte survey of CFOs.
  • Youth unemployment has reached its highest level in over a decade, driven by "jobless growth" as companies adopt AI and hold back on hiring.
  • Only one-third of CFOs expect AI to increase profitability in the coming year, despite widespread adoption.
  • Companies are investing in AI tools but neglecting employee training, leading to wasted potential, according to a Multiverse report.
  • The government faces pressure to address the fallout, with the AI minister promising support for workers.