AI Sparks 38% Drop in White-Collar Jobs in the UK, Report Shows

A survey revealed that UK companies are reducing their recruitment efforts for positions at risk due to the introduction of artificial intelligence, indicating that this emerging technology is contributing to a decline in the country's job market growth.

Employment opportunities have decreased throughout the UK as businesses reduce expenses amid slow economic growth and elevated interest rates, according to an analysis by McKinsey & Co., which revealed that total online job listings fell by 31% during the three months ending in May when compared to the corresponding period in 2022.

However, the impact has been greatest for roles anticipated to undergo major changes due to AI: Job listings for these positions—such as those in technology or finance sectors—fell by 38%, nearly double the decrease observed in other areas, as reported by the consultancy company.

The expectation of substantial—though not yet clear—future increases in efficiency, particularly as the technology and its uses develop further, is leading businesses to reassess their employee plans and temporarily halt parts of their hiring processes," noted Tera Allas, a senior advisor at McKinsey.

The pattern seems to be placing additional pressure on the UK employment sector at a time when tax rises lead to reductions in low-skill industries such as retail and tourism, and the rate of economic expansion slows down.

Jobs that are heavily impacted by AI — where the technology has the potential to take over part of the work — experienced the biggest drops in job openings, according to McKinsey’s research. The demand for roles like software developers, business advisors, or visual artists decreased by more than 50% during the past three years.

Certain factors could also stem from sector-related challenges and a tough overall economic environment. However, McKinsey noted that in certain industries, such as professional services and information technology, the number of available positions decreased despite companies experiencing strong growth rates.

Information provided by the job search site Indeed also revealed initial indications that artificial intelligence is influencing recruitment choices. According to Pawel Adrjan, director of EMEA economic research at the Indeed Hiring Lab, this data suggests that companies often reduce their hiring in areas related to developing or employing AI technologies.

For instance, positions in mathematics, primarily focused on data science and analysis roles, saw the largest proportion of AI references in their job postings, according to Indeed data. However, these opportunities have decreased nearly 50% compared to pre-pandemic times. On the opposite side, careers in real estate or education—where technology is seldom mentioned—experienced growth during this time.

Certain beginner positions that involve activities such as condensing meeting discussions or reviewing paperwork are highly vulnerable to artificial intelligence, hastening the reduction of these roles as businesses reduce staffing expenses. Entry-level opportunities, including training programs, internship placements, or early-career positions without educational prerequisites, have decreased by nearly one-third since ChatGPT was introduced at the close of 2022, based on information from the employment search platform Adzuna.

"The swift advancement of artificial intelligence is increasing challenges for young professionals seeking employment, many of whom remain affected by the lingering effects of the pandemic, including rising prices, financial difficulties, and limited corporate optimism," stated James Neave, director of data science at Adzuna.