Artificial intelligence appears to cut more jobs than it creates

Artificial intelligence appears to be contributing to a net loss of jobs, according to a new analysis of how organisations are adopting the technology across their operations. Research by Morgan Stanley, based on responses from nearly 1,000 companies that have been using AI for at least a year, suggests that British firms have shed more roles than they have created as a direct result of AI deployment. The study indicates a net reduction of around 8 percent of roles in the UK over the past twelve months, a higher figure than reported in comparable surveys of companies in the United States, Germany, Japan and Australia.

While the introduction of AI has led to some job creation, particularly in roles linked to data, systems oversight and specialist technical skills, these gains have been outweighed by redundancies and posts that have not been refilled. Employers reported an increase of roughly 15 percent in hiring for AI-affected roles, but this was more than offset by reductions elsewhere.

The impact has been most pronounced among mid-career workers, defined in the research as those with between two and ten years’ experience. This group was the most likely both to lose roles due to automation and to be rehired, retrained or redeployed into new positions within the same organisation. Entry-level and routine roles were also identified as particularly exposed to automation, reflecting wider trends in digital transformation.

Despite the reduction in headcount, companies reported productivity gains associated with AI adoption. Average productivity was estimated to have risen by around 11 percent, broadly in line with international findings. Employers noted improvements in efficiency, speed of delivery and the ability to scale certain tasks without increasing staffing levels.

The findings coincide with a wider slowdown in recruitment across the UK labour market. Vacancy data and analysis from job boards suggest a sustained decline in hiring for some professional and technical roles, including areas such as software development and consultancy, where AI tools are increasingly used to automate or augment work. This trend has been reinforced by broader economic pressures, including rising employment costs and subdued business confidence.

Separate surveys indicate that concerns about job security are growing among UK workers. A significant proportion of employees report anxiety about the potential for AI to change or eliminate their roles over the next few years, with younger workers expressing particular uncertainty about career progression in an AI-enabled workplace.

The research adds to a growing body of evidence that the effects of AI on employment are uneven and sector-specific, with changes to job design, skills requirements and workforce structure emerging more quickly than overall job growth linked to the technology.