A majority of large British companies plan to reduce staff numbers as they increase their use of artificial intelligence (AI), according to a recent survey of chief financial officers (CFOs). The findings highlight the evolving impact of AI on the workforce amid the country’s current economic conditions.

The survey, conducted by Deloitte between September 17 and October 1, found that 52 percent of CFOs anticipate cutting headcount over the next year due to AI implementation. Despite this, many companies are still in the early phases of integrating AI, with 67 percent of respondents saying they have completed only about a quarter of the changes they expect the technology to bring. The sample included 66 CFOs, with 12 from FTSE 100 companies and 25 from FTSE 250 companies.

The trend toward workforce reduction through AI deployment is taking place even as Britain’s economy experiences growth that outpaces many European counterparts. However, this growth is accompanied by rising long-term unemployment and the highest youth joblessness rates in over a decade. This development underscores the difficulties facing the Labour government led by Prime Minister Andy Burnham, as it contends with balancing technological progress and employment challenges.

Kaniska Narayan, AI Minister, acknowledged the anxieties surrounding AI’s impact on jobs during a speech on October 12. Narayan emphasized a commitment to ensuring that workers are not left to bear the burdens of technological change. “I understand why people are naturally anxious about their jobs and what artificial intelligence means for their children’s future,” he said, expressing empathy for those concerns.

While firms are leveraging AI largely as a cost-cutting measure, the effect on profitability remains uncertain. Only about one-third of surveyed CFOs believe AI will boost profit margins within the next year, signifying cautious expectations regarding immediate financial benefits.

Separately, a report from Multiverse, a London-based training platform founded by Euan Blair, highlighted a gap in companies’ ability to align AI investments with employee skills. Blair noted that businesses largely lack insight into their workforce’s AI capabilities and are at risk of inefficient spending. The report warned that many firms are investing heavily in AI tools without providing adequate training for their staff, potentially limiting the technology’s effectiveness.

Together, the findings from Deloitte and Multiverse illustrate a complex landscape where British businesses are embracing AI but face significant challenges around workforce transformation and maximising returns on investment in the technology.