Skip to main content

UK Firms Eye AI Layoffs as Youth Joblessness Hits Decade High

UK Companies Poised to Replace Workers with AI, Deloitte Survey Finds

A new Deloitte report paints a stark picture of the UK job market: more than half of large companies are preparing to swap human workers for artificial intelligence within the next year. The survey, which polled 66 chief financial officers (CFOs) between September 17 and October 1, found that 52% expect to cut staff as AI takes over. Even more striking, 67% say AI has delivered only a quarter of what they hoped – the technology is still in its infancy, yet the axe is already being sharpened.

The Rise of 'Jobless Growth'

The findings underscore a troubling trend: growth without employment. Companies are investing in AI and facing high injury costs, so they're not hiring at the pace of economic expansion. The result? Long-term unemployment is climbing, and youth unemployment has hit its highest level in over a decade. It's a bitter irony that this is happening in an economy growing faster than many of its European neighbors.

Government Promises vs. Corporate Reality

For Prime Minister Andy Burnham's Labour government, this is a political headache. AI minister Kanishka Narayan tried to calm nerves on Monday, pledging, "We will never let ordinary workers bear the cost of the AI revolution alone." He acknowledged public anxiety about jobs and the next generation's future. But words are cheap. Only one-third of CFOs believe AI will boost profits in the coming year, meaning companies are cutting costs without a clear path to returns.

The Training Gap: Buying Tech, Not Skills

A separate report from London training platform Multiverse, founded by Euan Blair, highlights a critical blind spot. Companies are pouring money into AI tools but barely training employees to use them. "Very few companies know what their employees can actually do with AI," the report notes. The upshot: wasted investment and a workforce that can't keep up. You can buy the technology, but without the skills, it's just expensive shelfware.

What This Means for Workers

So where does this leave the average worker? If you're in a large UK company, the odds are growing that your role could be automated. But it's not all doom and gloom – the fact that most AI projects are underdelivering suggests the transition may be slower and messier than headlines imply. Still, the warning signs are clear: without serious investment in retraining, the UK risks a lost generation of young workers and a widening skills gap.

Key Points:

  • 52% of UK CFOs plan to use AI to cut staff within a year.
  • 67% say AI has met only a quarter of expectations, yet layoffs are already planned.
  • Youth unemployment is at its highest in over a decade, driven by 'jobless growth'.
  • Only 33% of CFOs expect AI to increase profitability.
  • Training gap: Companies invest in AI tools but neglect employee upskilling.