The shrinking is moving up the building

Yesterday I wrote about the bottom rung — the graduate and entry-level jobs thinning fastest, the ones we have most recently taught a machine to do. I want to follow the line upward, because the newer data does. The CIPD, the professional body for HR, found in its latest Labour Market Outlook that roughly one in six UK employers expect artificial intelligence to reduce the size of their workforce over the coming year. The expectation is strongest among larger private-sector firms — the kind that employ a lot of people in the middle.

That is a survey of intentions, not a count of redundancies, and the distinction matters. But intentions are how a workforce shrinks: a post not refilled, a team that "absorbs" the leaver's work, a graduate scheme quietly paused. If you manage people in Britain, you have probably already seen the soft version — the hiring that didn't happen rather than the firing that did. One in six is not a forecast of collapse. It is a forecast of erosion, and erosion is hard to see from inside.

Here is the part I won't smooth over. The UK labour market is also slowing for reasons that have little to do with AI — higher employer National Insurance, minimum-wage rises, a flat economy, the long normalisation after the pandemic hiring rush. Vacancies fell to around 711,000 early this year, the lowest since 2021, because demand is weak as much as because software is capable. When a firm says it expects AI to shrink its headcount, it may mean the technology, or it may mean the technology hands it a tidy reason for a cut it already wanted. Both are happening. Telling them apart is the work.

What I keep returning to is the question this publication exists to ask. If we are at the start of needing fewer human hours, the test is not whether output rises — it will — but whether the hours we lose are replaced by anything we would choose. A workforce that shrinks by attrition does not free people; it strands them, one unfilled vacancy at a time, with no plan for what they do instead. "What humans do when we don't have to work" is a hopeful question only if someone is deciding the answer. Right now the answer is being set by a thousand separate hiring decisions, and nobody is adding them up.

So I would watch the middle of the org chart, not only its entrance. The graduate squeeze made headlines because it has a face — the bright 22-year-old with 140 applications and no offer. The next stage has no face. It is a department that is one person smaller this quarter than last, and was never advertised as a loss. That is the shape of a workforce shrinking by intention, and one in six employers have now told us it is what they intend.