UK Suffers Highest AI-Driven Job Losses Among Major Economies, Morgan Stanley Reports

British workers are bearing the brunt of AI adoption more severely than their international counterparts, according to new Morgan Stanley research. UK firms reduced their workforce by a net 8% over the past year due to AI implementation—double the average of other nations studied, including Germany, the US, Japan, and Australia.

Productivity gains tell a contradictory story. UK companies using AI for at least a year saw productivity surge 11.5% on average, with nearly half exceeding that figure. Yet American firms achieved similar efficiency gains while expanding employment—a stark contrast to Britain's job cuts.

The timing exacerbates existing pressures. Businesses grapple with soaring payroll costs, stagnant growth, and political instability. Job reductions now outpace any period since 2020 as unemployment nears a five-year peak. Minimum wage hikes and increased national insurance contributions continue forcing staffing reassessments.

While job postings decline globally, UK employers retreat most aggressively from AI-vulnerable roles—particularly in software development and consulting. The structural shift underscores how technological disruption interacts with local economic conditions.