The head of a major UK online retailer anticipates that automation and artificial intelligence (AI) will lead to a significant workforce reduction of up to two-thirds within the next three years.
Nick Glynne, CEO of Buy It Direct, which owns Appliances Direct, conveyed to BBC 5 Live’s Wake Up To Money program that the employment outlook in the UK appears “very bleak” for his company.
The company currently employs over 800 individuals, and it is estimated that more than 500 jobs could be affected. While Mr. Glynne clarified that this is not a “fixed plan,” he indicated that government-imposed cost increases are accelerating the process.
HM Treasury responded by stating that increased employer taxes have enabled the government to “deliver on the priorities of the British people.”
Buy It Direct, headquartered in Huddersfield, operates several online retail brands, including Furniture 123.
The company has a global presence, employing an additional 150 staff members overseas, including a customer service operation in the Philippines.
Mr. Glynne cited the increases in the national living wage and national insurance contributions, which took effect in April, as contributing factors to the government’s “tax decisions [which] have accelerated the direction of travel.”
“Our forecast is to have two-thirds less people, with the same revenue, same activity; two-thirds less people in an office environment within three years, and two-thirds less in our warehouse environment through investment in automation.”
“A mixture of AI on the office side, and technology involving robots and automation and mechanisation in the warehouse, means that the future for employing UK people is very bleak for someone like us.”
A spokesperson for HM Treasury defended the government’s position as “pro-business.”
The spokesperson highlighted a corporation tax capped at 25% and noted the government’s efforts to reform business rates and secure trade agreements with the US, EU, and India.
“The tax decisions we took at the Budget last year mean that we have been able to deliver on the priorities of the British people, from investing in the NHS to cutting waiting lists and putting more money in their pockets with a wage boost for millions,” the spokesperson stated.
The retail executive’s remarks coincide with growing concerns about job displacement due to AI, particularly in entry-level positions.
Graduates in graphics design and computer science are among those who have reported increased competition from technology for available roles.
Late last month, Amazon announced it was cutting 14,000 jobs, stating that it needed to be “organised more leanly” to capitalize on the opportunities presented by AI.
Mr. Glynne also stated that higher taxes on the business had prompted the company to modify its outsourcing practices, leading to the recruitment of more senior positions outside the UK.
“It was an experiment which we wouldn’t otherwise have done, and mostly it’s been successful,” he said.
“So we’ve now got accountants, managers, traders, buyers, senior IT managers all working abroad.
“You look at many of the roles overseas, just as qualified, more motivated in some ways than UK workers because there’s less protection for people often in those countries [from] where we buy in cheaper labour.”
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