The UK is losing jobs to AI – here are the roles being hit
The promise of AI is vast, but its full economic impact is still emerging. Nevertheless, labour market effects are already visible: job adverts have dropped most for the occupations most exposed to AI.
While this has raised concerns – especially for young graduates – the real story is more complex, with AI acting alongside broader economic forces, new data from consulting firm McKinsey shows.
The group’s latest global survey shows nearly 80% of the world’s largest companies – typically with tens of thousands of employees – reported using AI in at least one business function. In the UK, while smaller firms are lagging behind, over a third of mid-sized businesses (with more than 250 employees) say they are now using these technologies.
Yet, for all the momentum, broad-based productivity improvements remain elusive to date. Although 92% of global businesses plan to ramp up investment in generative AI in the next three years, just one percent believe their efforts have reached maturity. Only around 20% report a tangible impact on enterprise-level earnings. The tools exist, but integrating them into workflows and changing how people work is proving challenging.
Hiring slowdown
At the macro level, while the data for June and July 2025 suggests a slight uptick in hiring intentions, the broader picture is of a marked cooling in the labour market. Between the three months ending in May 2022 and May 2025, the number of vacancies fell by 43%, from 1.3 million to 0.7 million. Analysts expect unemployment to rise from 4.6% to 4.8% by the end of the year.
Much of the job market slowdown reflects broad economic forces. Unprecedented uncertainty from geopolitical tensions, higher interest rates to curb inflation, cautious households saving more and consuming less, tighter public finances, and rising employee costs are all contributing to a slower pace of recruitment.
The net balance of businesses expecting to increase rather than decrease employment has fallen – from +2.4% in July 2022 to just +0.2% in July 2025 – reflecting fewer firms expanding and more planning to shrink their workforce.
However, there are also signs that the advent of AI and LLMs is dampening hiring intentions, McKinsey said.
“Since enterprise-wide productivity gains have yet to materialise, this cannot be in response to large-scale output improvements,” the group said.
“But a mix of observed task-level time savings, and the anticipation of significant – albeit uncertain – future productivity gains, especially as the technology and its applications mature, is prompting companies to review their workforce strategies and pause aspects of their recruitment.”
This effect is particularly pronounced in roles where AI has the most potential to reshape human work, either by automating or augmenting it, McKinsey said.
“Since the three months ending in May 2022, the overall volume of online job ads has declined by 31%. However, while the reduction for occupations with low AI exposure was 21%, job ads dropped by 38% for roles with high exposure to AI and LLMs.
“Some of the biggest declines were in jobs that have been predicted to have the highest impacts from generative AI. These include software developers and other IT workers, as well as professionals in data, design, media, research, legal, HR, finance, and business.”
