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1 in 4 Large UK Businesses Plan AI-Driven Job Cuts in 2026. Can the Budget Save Junior Staff?

ended 11. November 2025

The FT reports that new research from the Chartered Institute for Personnel and Development reveals that 26% of large private sector organisations expect to cut headcount within the next year due to artificial intelligence, with junior roles most likely to be axed. 

The findings come just weeks before the Chancellor's Budget, raising urgent questions about whether government intervention can protect early-career workers from automation.

The CIPD survey shows the starkest impact in financial services, where 37% of employers expect AI to reduce jobs, followed by IT (26%) and legal, accounting and consultancy sectors (24%). Among employers planning cuts, a quarter expect headcount reductions of more than 10%. Junior professional, managerial, clerical and administrative positions are most at risk.

The timing couldn't be worse for young workers already facing a hiring slump. Almost 950,000 people aged 16-24 (12.8%) were not in education, training or employment in Q2 2025, up from 10.7% at the end of 2019. Sectors like retail and hospitality, traditional entry points for young workers, were hit hard by recent wage tax increases. Now office jobs are dwindling.

Meanwhile, small and medium-sized businesses show a different pattern: just 9% expect AI-driven headcount reductions, suggesting they're "doing more with the same number of people" rather than cutting jobs. Microsoft research claims AI adoption by SMEs could add £78 billion to the UK economy, if they can afford to invest.

We want your views:

  • Can Budget incentives for AI adoption prevent job cuts, or will they accelerate human replacement?
  • How do we balance productivity gains for large firms against career access for young workers?
  • Is the real crisis that AI's eliminating entry-level jobs before young people gain "enhanceable" experience?
  • Are SMEs the answer by keeping humans for tasks boosted by face-to-face interaction, while large firms automate essentially faceless services ti lower cost?
  • If technological change renders human workers unemployable, should we consider universal basic services (housing, healthcare, education) sooner rather than later?
  • Does society owe a safety net to those displaced by productivity gains that primarily benefit shareholders and executives?

4 responses from the Newspage community

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Colette MasonVerified
AI Ethics Consultant at Clever Clogs AI
James Cockett, senior labour market economist at CIPD warns AI risks leaving people behind.

Large employers are planning these cuts now, while Alan Milburn's investigation into helping NEETs won't report until next summer.

Policy can't move fast enough because we're still pretending this is about skills gaps and training programmes, when it's actually about profit margins and shareholder returns.

AI holds great potential for productivity providing society accepts young people being sacrificed on the altar of quarterly earnings.

Large firms should automate to cut costs. SMEs, perfectly placed for bespoke and personalised work, should use AI to do more with existing humans. One destroys careers before they start; the other builds capacity.

If we're serious about protecting early-career workers, the Budget needs to make human-AI collaboration more profitable than pure automation.

Otherwise, we're just investigating why the stable door's open while the horse bolts.
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Rob MansfieldVerified
Independent Financial Advisor at Rootes Wealth Management
There is a risk that companies cut jobs too soon, before the technology can cope. There are companies out there whose phone systems still warn people about slow response times due to Covid. There are some companies who are penny wise and pound foolish and risk trashing their reputation by leaping before things are ready. We saw this with the Post Office and their Horizon system.
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Pete MuglestonVerified
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
The growth in young people not in work, education, or training is highly concerning. With a looming fiscal crisis driven by an ageing population on the horizon, we need our young people contributing to productivity.

Jobs have been displaced throughout history due to innovation, and they have always been replaced by new ones that we didn’t know existed. The Chancellor should focus on getting spending under control so that tax cuts can allow businesses to thrive.
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Patricia McGirrVerified
Founder at Repossession Rescue Network
Britain risks pulling up the ladder to work.
Big firms are automating entry-level roles faster than policy can keep up, while small businesses are usually left to pick up the slack. You don’t protect growth by taxing innovation, but you can’t ignore the social cost either. Junior roles aren’t just jobs, they’re gateways into the economy. Keep cutting them, and it’s productivity up, PAYE down; great for shareholders, a disaster for public purse holders.