| British Companies Shift Focus from Hiring to AI Investment |
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| British companies are planning to reduce staff hiring and instead invest in artificial intelligence, according to a recent survey by Boston Consulting Group (BCG). The decision comes as a response to an increase in social insurance tax, with 51% of business managers revealing their intention to allocate personnel funds towards AI technology. |
| BCG highlighted that rising labor costs are prompting companies to seek ways to boost productivity through generative AI and automation. As companies face billions in additional expenses due to tax hikes, plans to increase minimum wages and upcoming labor law reforms, such as abolishing trial periods for protection against unfair dismissal and restricting zero-hour contracts, are further fueling the shift towards AI investments. |
| Survey results from BCG showed that 57% of managers surveyed plan to cut back on hiring by 2025 in light of these changes. By 2024, 44% of study participants have prioritized investments in AI. A leading member of the UK’s largest companies group warned that the combination of rising labor costs and automation capabilities will inevitably accelerate job cuts. |
| The impact of digitalization on the labor market is already evident, with British Telecom announcing plans to cut 55,000 jobs by 2023, of which 10,000 are linked to automation. Similarly, Swedish company Klarna reduced its workforce by 20% in the past year, with the CEO stating that AI will further cut staff by 50%. |
| Despite a slowdown in the UK economy, the demand for AI specialists is on the rise. Data from the UK National Statistics Office showed a decrease in job vacancies, particularly in the information and communications sector. However, the government believes that the measures being taken will help restore economic stability, focusing on support for businesses through corporation tax restrictions, investment incentives, and improving employee rights. |
| The British government recently unveiled a comprehensive plan for the widespread adoption of artificial intelligence over the next decade. The plan aims to accelerate AI development to boost labor productivity, enhance citizens’ quality of life, and solidify Great Britain’s position as a global leader in AI. |
/Reports, release notes, official announcements.