Artificial intelligence to exchange staff after Budget, warns boss of UK software program large Sage

The boss of one of the UK’s largest software groups said more businesses will replace workers with artificial intelligence (AI) as tax hikes announced in the Budget leave them searching for ways to cut costs.

Steve Hare, chief executive of Sage, says companies looking to use AI to boost productivity would now step up their efforts.

‘That trend towards a more digital economy was already there but in many ways, this [the Budget] accelerates it,’ he said.

Steve Hare, chief executive of Sage, companies already looking to use AI to boost productivity, would step up their efforts

Newcastle-based Sage provides companies with software that makes it easier to manage their accounts. 

The firm has been using AI-powered tools for several years and this year unveiled Sage Copilot, an AI assistant based on the same technology as chatbots like ChatGPT.

Hare stressed that Sage did not want to replace staff with robots but instead use its tools to ‘elevate the work of humans’.

‘We are using machines to help our customers be more efficient and allow them to spend their time where they think it is best to grow their business,’ he added.

The comments came as Sage shares hit a record high – up 17.9 per cent, or 192.5p, to 1269.5p – after a 43 per cent rise in profit to £452million for the year to September on the back of strong demand.

The group also cheered investors by unveiling plans to buy back £400million of its own stock.

Business leaders and analysts have warned that the rise in costs due to the Budget would lead to increased AI use and automation, putting jobs at risk.

Retailers and hospitality firms are particularly vulnerable as lowering the threshold at which employers begin to pay National Insurance Contributions from £9,100 to £5,000 hits their ability to hire lower-paid workers.

At the same time, Chancellor Rachel Reeves raised the rate from 13.8 per cent to 15 per cent.

Investment bank RBC Capital Markets said last week it could mean more self-scan checkouts at supermarkets.

Earlier this month Allison Kirkby, the boss of telecoms giant BT, warned the company would go ‘harder and faster’ with cost-cuts to counter the tax increase, including more AI and automation to improve productivity.