23rd October 2026
From banking and insurance to retail and professional services, artificial intelligence is changing the way large employers operate. The question is whether new jobs will replace those that disappear.
Artificial intelligence is moving beyond the experimental stage and into the day-to-day running of major businesses. Companies are investing billions in new technology, and some are already reducing their workforces as they look for ways to do more with fewer employees.
The latest announcements about thousands of potential job losses have raised an important question: are these isolated decisions, or are we seeing the beginning of a much wider change in the world of work?
The answer is that the changes extend well beyond one company or one industry. However, it is important to distinguish between jobs explicitly being cut because of AI and reductions driven by wider cost-cutting, restructuring and changes in business strategy.
Banks and financial services in the spotlight
Banking is one of the industries where the potential impact is particularly clear. Large banks process enormous quantities of information, from loan applications and insurance claims to customer enquiries and compliance checks.
Much of this work follows established procedures. AI can help read documents, identify inconsistencies, answer routine questions and process information at a speed that would be difficult for a large human workforce to match.
Barclays' reported plans to cut around 5,000 jobs illustrate the scale of the issue. Other financial institutions, including HSBC and Standard Chartered, have also been associated with substantial workforce-reduction plans.
But not every job reduction can be attributed directly to AI. Banks have been cutting costs and reorganising their businesses for years. The arrival of more capable AI systems may accelerate a process that was already under way.
The important point is that employers increasingly have another way to reduce costs without necessarily reducing the volume of work they undertake.
Technology companies are not immune
It might seem surprising that technology companies themselves are cutting jobs while investing heavily in AI. Yet there is a clear commercial logic.
Companies such as Microsoft, Amazon and software businesses including Atlassian have announced significant workforce reductions or restructuring programmes. The reasons vary, including the removal of management layers, changing business priorities and a shift towards AI-related investment.
AI can also help software developers write and test code, assist customer-support teams and automate routine administrative work. If a smaller team can complete the same workload, management may decide that fewer employees are required.
However, it would be wrong to assume that every redundancy at a technology company is caused by AI. Companies also respond to changing demand, previous over-expansion and pressure from investors to improve profitability.
What is changing is the range of tasks that machines can undertake, and the possibility that this will allow companies to operate with fewer people.
It is not just about call centres
For many years, automation was associated with factory production and machinery replacing repetitive manual work. AI potentially reaches much further into jobs traditionally regarded as requiring office-based knowledge and experience.
Accountants may use AI to check records and prepare routine reports. Insurance companies can automate parts of claims processing. Retailers can use it to forecast demand and manage stock. Recruitment departments can automate elements of candidate screening, while professional-services firms can use AI to search documents and prepare preliminary research.
Public services may also find opportunities to automate routine enquiries, process applications and handle straightforward administrative tasks.
That does not mean these occupations will simply disappear. Human judgement, responsibility, personal contact and the ability to deal with unusual circumstances remain important. But individual jobs may change substantially, and fewer people may be required for particular tasks.
For workers, the distinction between a job disappearing and a job changing may offer little comfort if the result is redundancy.
The figures need to be treated carefully
Announcements about job losses can create dramatic headlines, but they do not always tell the whole story.
Some companies announce proposed reductions that will take place over several years. Others offer voluntary redundancy, recruit fewer replacement staff or move employees into different positions. A workforce reduction may also reflect several causes at once.
Consequently, adding together every announced job cut and describing the total as jobs already lost to AI would give a misleading picture.
There is also a difference between a company saying that AI will make its workforce more productive and confirming that specific employees are being made redundant because of it.
Nevertheless, the direction of travel is clear. Businesses are exploring how AI can reduce costs, increase output and change the balance between human labour and technology. The precise number of jobs affected will become clearer as companies report what they actually implement.
What happens to the people who lose their jobs?
This is where the debate becomes more difficult.
Supporters of AI point out that previous technological revolutions have created new industries and occupations. Computers eliminated some types of clerical work but also generated demand for software developers, IT specialists and many other professions that barely existed before.
AI may follow a similar pattern. New opportunities could emerge in developing, maintaining, securing and supervising AI systems, as well as in businesses that use the technology to offer new services.
But there is no guarantee that the new jobs will match the old ones in number, location, pay or required qualifications.
A bank employee whose position disappears in Edinburgh or Glasgow cannot automatically move into a technical role requiring years of specialist training. Nor can a worker in a smaller Highland community necessarily relocate to a major city to take advantage of new opportunities.
Retraining can help, but it takes time and money. Employers, colleges and governments will need to consider how workers can move into new roles before redundancies become a wider social problem.
The danger for local economies
The implications are not confined to the employees directly affected.
Workers' wages support shops, cafés, tradespeople and other local businesses. If large employers reduce staffing and household incomes fall, the consequences can spread through the wider economy.
For Caithness, the impact could work in both directions. Small businesses might use AI to handle routine paperwork, improve marketing and overcome some recruitment difficulties. That could help firms operate more efficiently, particularly where finding staff is difficult.
But if larger employers and public services reduce their staffing without new employment taking its place, local spending could suffer. The benefits of AI would then be felt by businesses gaining productivity, while the costs would fall partly on workers and communities.
There may also be opportunities for smaller firms to establish new services using AI without needing the large workforces that would previously have been required. Whether those opportunities produce enough local jobs is a separate question.
Who benefits from the productivity gains?
Perhaps the biggest question is what happens to the money saved.
If AI allows a company to produce the same goods or services with fewer employees, it may increase profits, reduce prices or invest in expansion. It could do all three.
But if the principal result is lower staffing and higher profits, the benefits may be concentrated among shareholders and senior executives while displaced workers struggle to find equivalent employment.
There is a wider economic risk, too. Businesses depend on customers having money to spend. If productivity rises but wages and employment fail to keep pace, consumer demand could weaken. The overall economic benefit would then be less straightforward than the savings enjoyed by individual companies.
Governments will need to consider education, retraining, employment support and how the gains from higher productivity are shared. These questions are not unique to AI, but the pace of change could make them more urgent.
A technological revolution, but not a guaranteed disaster
It would be premature to predict mass unemployment simply because companies are investing heavily in AI. New technology can create opportunities as well as eliminate existing work, and businesses may discover that human skills remain essential in areas where automation initially appears attractive.
Equally, it would be complacent to assume that every displaced worker will find a better job.
The real test will be whether the economy creates sufficient new opportunities, whether workers can access them and whether the benefits of greater productivity extend beyond company profits.
AI may ultimately allow businesses to deliver better services at lower cost. But a successful technological revolution should not be measured solely by how much money companies save or how many employees they no longer need.
It should also be measured by whether people can earn a living, communities can sustain their local economies and the next generation has worthwhile employment to look forward to.
The question is no longer simply what AI can do. It is whether the economy can adapt quickly enough to ensure that the benefits of doing it are widely shared.