UK draws up contingency plan for ‘unprecedented’ AI job losses
Britain is preparing for the possibility of “unprecedented” AI-driven job losses, the AI minister has said, as companies increasingly cut staff and automate parts of their workforce.
Kanishka Narayan said one of his top priorities was drawing up a contingency plan for a severe disruption to the jobs market, which could include changes to labour policy and regulation.
“If it’s going to hit us in a big way, you are going to want to be as ahead of the curve as possible”, Narayan told a Labour conference event on Monday.
He stressed there was currently no evidence that AI had caused an overall fall in UK employment, but said the government had to “take seriously the possibility of an unprecedented impact on the jobs market”.
He added that official figures could also be underestimating the impact as companies adopt AI without explicitly attributing hiring decisions to its deployment.
One tech company had told the minister it was recruiting fewer people because some tasks had been automated, he said, meaning “the actual net impact might not be fully captured”.
The unemployment rate stood at 4.9 per cent in the three months to July in the UK, up 0.2 percentage points on a year earlier, while the number of payrolled employees fell by 101,000 over the year. Early estimates suggest a further 26,000 fall in August.
Just this month, Newspaper group Reach announced plans to cut another 220 editorial jobs as it grapples with declining traffic from search engines, including the growing use of AI-generated answers that remove the need for users to click through to publishers.
Oracle has also cut hundreds of jobs from its US cloud infrastructure business while pouring billions into AI infrastructure, while Amazon, Meta and Microsoft are among technology groups to have announced thousands of job losses this year.
Eight million jobs in worst case scenario
The Institute for Public Policy Research (IPPR) has warned that around eight million UK jobs could be affected in a worst-case scenario, although the think tank said such an outcome was not inevitable.
Carsten Jung, an economist at the IPPR, said around 11 per cent of British jobs were currently highly exposed to replacement by AI chatbots, with administrative work among the most vulnerable.
More capable AI agents could ultimately affect tasks across a much larger share of the economy, he added.
The think tank is now working on what it describes as a “pandemic preparedness” approach to severe AI disruption, including how workers could be retrained if automation accelerates.
“We are not preparing enough for something quite big that’s coming”, he said.
Narayan said on Monday that the government wanted workers to have a greater say over how the technology was introduced and promised “much better transparency when AI and technology is adopted”.
Such transparency could become increasingly important if companies use productivity gains from AI to reduce recruitment rather than announce outright redundancies, making its effect harder to identify in headline jobs figures.
The government could consider changes to “labour market policy” and “even where we might go on some aspects of regulation” under a more severe scenario, Narayan said.