AI Hurting UK Jobs More Than Other Big Economies – Why? Let’s check

Britain is losing more jobs than it creates due to artificial intelligence, outpacing rival large economies like the US, Japan, Germany, and Australia, according to Morgan Stanley research. UK companies reported an 8% net job loss from AI over the past year—the highest rate surveyed—amid rising productivity but squeezed hiring.

AI is hitting UK employment more than any other country. Not surprising given our exposure to the service sector.

So why do we have any immigration at all?

We’ve been told since WW2 immigration is about filling vacancies but we already have a massive excess of labour supply. pic.twitter.com/5ZI0lNs1DC

— Wolf 🐺 (@WorldByWolf) January 26, 2026

The study, surveying firms using AI for at least a year in consumer staples, retail, real estate, transport, healthcare equipment, and cars, found British businesses gained 11.5% productivity from AI. US firms saw similar boosts but net job gains, highlighting the UK’s unique vulnerability.

Rising costs, higher taxes, increases in minimum wages, and higher employer national insurance payments are putting more pressure on businesses. Because of this, unemployment has reached its highest level in four years.

A Randstad survey shows that more than 25% of UK workers are worried that AI could completely replace their jobs within the next five years. Gen Z workers are the most anxious about coping with these changes, while baby boomers feel more confident. Many companies are cutting jobs that are usually meant for people in the early stages of their careers, with about 2–5 years of experience.

The UK is losing more jobs than it’s creating because of artificial intelligence — and at a faster rate than its international peers https://t.co/lhpm7ijE5j

— Bloomberg (@business) January 26, 2026

Sadiq Khan warned that AI could have a very big impact on London’s office-based jobs. Areas like finance, creative industries, law, accounting, consulting, and marketing could be badly affected, which may lead to large job losses.

In a speech at Mansion House, he asked the government to step in and help create new jobs to replace those lost because of AI. He said this is a moral, social, and economic responsibility. He also warned that entry-level jobs are likely to disappear first, making it harder for young people to begin their careers.

Echoing concerns, JP Morgan CEO Jamie Dimon called at Davos for governments and businesses to support displaced workers or face civil unrest.

Morgan Stanley shared findings with Bloomberg, underscoring how AI’s benefits aren’t translating to UK jobs amid economic pressures.