Sadiq Khan has warned that artificial intelligence could trigger “mass unemployment” in London, with research suggesting up to one‑million jobs – roughly 18 % of the capital’s workforce – may be displaced within the next decade and that the city’s GDP could swing between a modest gain and a multi‑billion‑pound loss depending on how quickly skills are upgraded.

The alarm is rooted in a BBC report that cites LiveCareer UK’s analysis of 5.5 million London employees in 2025, identifying 200 000 tele‑marketers, 150 000 bookkeepers and 95 000 data‑entry specialists among the roles most vulnerable to automation. The figure of one‑million potentially altered jobs translates to an 18 % displacement risk, echoing the Institute for Public Policy Research’s (IPPR) projection that 18 % of UK jobs could vanish after ten years, with London as the most exposed region.

If the high‑end scenario materialises and reskilling lags, the IPPR warns that London’s output could be dragged down by 2 %–3 %, erasing £80‑£115 billion of annual GDP as unemployment rises and consumer spending contracts. Conversely, the same report outlines a best‑case where AI augments the workforce, delivering a 4 % uplift – roughly £150 billion on a £3.8 trillion base – provided the city captures productivity gains. The Tony Blair Institute offers a more modest net positive, forecasting a 0.4 % increase in employment and a comparable boost to GDP if AI is deployed to improve matching and efficiency. A McKinsey estimate, referenced by the BBC, suggests AI could add $2.2 trillion to the UK economy by 2030; proportionately, London could reap a 2 % (£70‑£80 billion) boost if reskilling succeeds.

Khan’s warning, delivered in a Mansion House speech on 15 January 2026, was stark: “The impact of AI on London’s labour market will be nothing short of colossal… Without proactive action, old roles may disappear faster than new ones are created.” He framed the challenge as a political priority, pledging £32 million to establish four new Skills Academies targeting the creative, digital, low‑carbon and health‑and‑social‑care sectors. By 3 January 2026, enrolments had reached 12 800, with 78 % of participants reporting high confidence in securing AI‑related employment.

Business leaders have echoed the mayor’s concerns while urging a coordinated response. The London Chamber of Commerce & Industry welcomed the Skills Academies as a “welcome first step” but called for a long‑term national strategy. The Confederation of British Industry’s chief executive, Tony Danker, argued that technology historically creates new roles rather than mass unemployment, stressing that “investment in skills now, not later” is essential. Both bodies highlighted the city’s status as an AI hub – home to approximately 1 300 AI‑focused firms, outstripping New York and double the combined totals of Paris and Berlin – and warned that without up‑skilling, London could lose its competitive edge.

Even the macro‑economic establishment has weighed in. Bank of England Governor Andrew Bailey, speaking on BBC Radio 4 on 15 May 2024, likened AI’s potential impact to the Industrial Revolution, noting that while the latter displaced workers, it did not cause mass unemployment. He cautioned that AI “may well have a similar effect” if policy does not keep pace with technological change. Recent ONS data show the unemployment rate rising to 5.1 % in October 2024, with an 85 000 increase among 18‑24‑year‑olds – the sharpest quarterly jump since November 2022 – underscoring the urgency of the mayor’s call.

The consensus among London’s political and business elite is clear: AI will reshape the labour market, but the scale of disruption hinges on the speed and scale of reskilling. Khan’s £32 million Skills Academies, early uptake figures and the city’s thriving AI ecosystem suggest a foundation for mitigation, yet the looming risk of an 18 % job displacement underscores the need for sustained investment and coordinated policy to turn a potential crisis into an engine of growth.

Sources