In the wake of tax hikes announced in the UK Budget, the boss of Sage, one of the country’s largest software groups, has warned that more businesses will turn to artificial intelligence (AI) to cut costs and replace workers. Steve Hare, the chief executive of Sage, believes that these tax increases will accelerate the trend towards a more digital economy.
While Sage provides software to help companies manage their accounts, the company has also been using AI-powered tools for several years. This year, they unveiled Sage Copilot, an AI assistant based on the same technology as chatbots. Hare emphasized that Sage’s intention is not to replace staff with robots, but rather to use AI tools to enhance human work. By automating certain tasks, businesses can become more efficient and focus their time on strategic activities that will drive growth.
Sage’s comments come as the company’s shares reached a record high, with a 17.9% increase, following a 43% rise in profit to £452 million for the year. To further please investors, Sage also announced plans to buy back £400 million of its own stock.
The rise in costs due to the Budget has prompted concerns from business leaders and analysts about increased AI use and automation, which could put jobs at risk. Retailers and hospitality firms, in particular, are vulnerable as the lowered threshold for National Insurance Contributions impacts their ability to hire lower-paid workers. The rate has also been increased from 13.8% to 15%. Analysts at RBC Capital Markets predict that these changes could lead to more self-scan checkouts in supermarkets.
Sage is not the only company looking to AI and automation to counteract the tax increase. Earlier this month, Allison Kirkby, the CEO of BT, a telecoms giant, announced plans for cost-cutting measures and increased use of AI and automation to improve productivity.
As technology continues to advance and companies search for ways to reduce costs and improve efficiency, the role of AI in the workforce is only expected to grow. The tax hikes in the UK Budget have acted as a catalyst for businesses to embrace AI on a larger scale, potentially leading to a more automated and digital economy. While concerns about job displacement persist, leaders like Hare stress the importance of utilizing AI to elevate human work rather than replace it entirely. As the landscape shifts, businesses must find a balance between innovation and the well-being of their employees.
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