One in six UK employers expect artificial intelligence to reduce the size of their workforce within the next 12 months, according to a major new survey warning of growing disruption to white-collar employment.
Research by the Chartered Institute of Personnel and Development (CIPD) found that 62 per cent of those expecting job losses believed clerical, junior managerial, professional, or administrative roles would be the first to go as automation accelerates.
The findings, released ahead of this month’s Budget, are based on the CIPD’s latest Labour Market Outlook — a survey of more than 2,000 employers — and highlight the growing tension between AI-driven productivity gains and the threat to early-career jobs.
The impact is expected to be most pronounced among large private sector companies, where more than a quarter (26 per cent) of employers anticipate cutting headcount as AI takes hold. That compares with 17 per cent across the private sector as a whole and 20 per cent in the public sector.
The warning comes as firms weigh AI adoption against high employment costs and sluggish growth since last year’s Budget. Global tech and professional services groups have already begun restructuring.
Amazon said last month it would cut 14,000 corporate roles, citing generative AI as the most transformative technology since the internet, while PwC reduced its global workforce by 5,600 in the past fiscal year — its first major downsizing since the 2008 financial crisis — despite spending nearly $1.5 billion to expand its AI capabilities.
Recruiters say employers are becoming more cautious about hiring, as they look to balance cost control with efficiency gains from automation.
Separate research by ManpowerGroup, which tracks hiring plans across 42 countries, found the UK faces one of the sharpest recruitment slowdowns globally, hit by what it called a “perfect storm of cost pressures, AI disruption, and policy uncertainty”.
The CIPD said the government must ensure that workers most exposed to AI — particularly those in early-career or lower-level professional roles in finance, insurance, IT, and administrative services — are supported with retraining and upskilling programmes.
James Cockett, senior labour market economist at the CIPD, said AI offered “huge potential for improving productivity and performance” but warned it also risked “leaving many people behind”.
“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,” he said.
Among employers expecting AI-related redundancies, a quarter (26 per cent) believe more than 10 per cent of their workforce could be cut within a year.
Overall, the net employment balance — the difference between employers planning to increase and those planning to reduce headcount — remains modest at +9. In the public sector, confidence has slipped further into negative territory, falling from –6 to –8.
A government spokesperson said ministers were focused on helping workers “take advantage of the huge opportunities” AI presents.
“We’re working with leading tech firms to train a fifth of our workforce in AI over the coming years and investing £187 million to bring digital and AI learning directly into classrooms and communities,” they said.
The government’s AI growth zones, they added, were already creating “thousands of new jobs and skills opportunities” across the UK, helping ensure that “working people can share in the benefits of AI.”
