The conversation about AI and jobs has been dominated by two extremes. Either AI is going to replace everyone, or it is going to create more jobs than it destroys. Neither extreme is particularly useful for a business leader trying to make real decisions about real people right now.
Having worked with executives navigating workforce transformation, my view is more grounded than either headline. The AI impact on workforce is real, it is already visible in specific areas, it is accelerating and the businesses that get ahead of it now will be in a fundamentally stronger position than those who react to it later.
What is already happening in the UK
The data is starting to tell a clear story, even if it is being quietly ignored in most boardrooms.
Research from King’s College London, published in December 2025, found that firms with high AI exposure reduced total employment by 4.5% on average, with the effect concentrated almost entirely in junior positions, which fell by 5.8%. These are not surplus roles, they are the training grounds through which businesses build the senior capability they will depend on in three to five years.
The Office for National Statistics found in September 2025 that 27% of UK businesses planning to adopt AI expect administrative and clerical roles to be most impacted, with 7% expecting overall headcount to decrease as a direct result. Those decisions are being made now, frequently before the AI has proved itself capable of replacing what those people actually do day to day.
In my experience, the pressure to cut is rarely coming from a clear-eyed assessment of what the AI can actually deliver. It is coming from boards wanting visible action, CFOs wanting margin improvement, and the anxiety of watching competitors announce AI strategies without knowing what those strategies actually contain.
The part nobody is putting in the business case
Every executive I speak to has modelled the payroll saving. Very few have modelled what walks out alongside their people when the restructure completes.
Institutional knowledge cannot be recovered from a shared drive. Client relationships built over years do not transfer to a system.
The contextual judgment that comes from experience inside a specific business is not something an AI tool can reconstruct from historical data. When experienced people leave, the gap they leave is rarely visible immediately. It shows up gradually, in slower decisions, in weaker client retention, in the AI underperforming because nobody left understands it well enough to course correct.
The ONS research found that of UK businesses currently using AI well, 33% chose to train and retrain existing staff as their primary approach, rather than automate or replace roles. The businesses getting results from AI have largely worked out something that the businesses still debating headcount cuts have not: their people are not an obstacle to the technology working. Their people are what makes it work.
Why junior roles matter more than most executives realise
The King’s College London researcher behind the 2025 study warned that the concentration of job losses among entry-level positions disrupts traditional skill development pathways, where workers master progressively complex tasks through hands-on experience.
This is the part of the AI impact on workforce that I find most underappreciated in the businesses I work with. The entry-level role being cut today is the source of the senior hire your business needs in 2030.
Close that pipeline and you do not just lose a junior employee, you lose the person who would have become your operations director, your head of client services, your most trusted team leader.
Recruiting senior talent externally after dismantling the internal development pathway is consistently more expensive, slower and less reliable than the original business case ever accounts for.
The skills gap problem compounds everything
According to the UK Government’s AI Labour Market Survey 2025, 97% of businesses surveyed identified at least one skills gap in the AI labour market, with the most significant gap being in understanding AI concepts and algorithms, a gap that has grown significantly over the past five years.
That tells me something important. Businesses are adopting AI tools faster than their people are being equipped to use them effectively. The gap between deploying a tool and integrating it properly into how a business actually operates is where most AI adoption quietly fails. Closing that gap requires people, investment in capability and time. Cutting the people first makes every part of that harder.
What the businesses navigating this well are doing differently
They are not treating AI adoption as a cost question, they are treating it as a capability question. The distinction sounds simple but it changes every decision that follows.
A cost question asks how few people do we need. A capability question asks what can our people achieve now that they could not achieve before. The first leads to restructuring, the second leads to a workforce that is genuinely more capable and a business that is genuinely more competitive.
They are also moving before the pressure becomes a crisis. Mapping human capital before making AI decisions, identifying where technology augments rather than replaces, investing in reskilling before deployment rather than after the damage is visible. These are not complicated steps. They are the steps that most businesses skip because there is no immediate pressure to take them, right up until there is.
See how the HUMAN Arc Framework helps businesses map their workforce before making AI decisions
The window to get this right is open, but it will not stay open
The AI impact on workforce in the UK is still in its early stages. The businesses furthest along the adoption curve are already restructuring, already cutting junior roles, already discovering what they gave up. The businesses a step behind them have a window that those businesses no longer have: the chance to design a workforce strategy before the decisions become reactive.
That window is the most valuable commercial asset most SME leaders are sitting on right now without realising it.
By Abi Demi, Managing Director & Talent Strategy Consultant, Spencer & Trent.
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Spencer & Trent works with executives and leadership teams across the UK to design workforce strategies that integrate AI without losing your people.
