AI driven redundancies are now firmly in the news, and they’re not confined to one sector or one geography. You may have seen reports in January 2026 that Amazon is cutting 16,000 roles as it pushes AI and efficiency, completing a plan for around 30,000 job cuts since October 2025, alongside BT’s plans to reduce its workforce by up to 55,000 roles by 2030.
As employers increasingly look to automation, organisations need to understand how to approach redundancy programmes lawfully, humanely and without damaging the future of their workforce.
Lauren McLaughlin, Partner and Employment Solicitor at Loch, discusses the legal risks, employee wellbeing considerations and practical steps employers can take to futureproof their organisation in the age of AI and cost cutting.
Where AI driven redundancy is hitting first
The first wave of AI enabled restructuring is, in Lauren’s experience, not primarily focused on senior leadership or strategic roles. It’s landing most heavily in junior, process based work, particularly roles where tasks are repeatable, data heavy or transactional.
There’s a clear commercial logic behind this shift. Employers are managing increased overheads – from wage rises to broader employment costs – and they’re looking for efficiencies that can be scaled quickly. In some organisations, AI is being treated like any other operational improvement: if five people once did the work and the same output can now be achieved with fewer, businesses will ask whether the structure still makes commercial sense.
This is where organisations need to be careful. Restructuring can be lawful and commercially necessary, but it must be handled with rigour and fairness.
Legal risk: AI doesn’t change the rules, but it raises the stakes
AI related redundancy is not a separate legal category. It can still amount to a genuine redundancy situation in law, and employers must still follow a fair process. Replacing a human role with an AI enabled system may be a legitimate business decision which creates a potential redundancy situation for some roles, but it doesn’t create a shortcut. The criteria for a redundancy situation can be met if the employer can show they have a reduced need for employees doing particular work, including as a result of AI efficiencies.
The risks for the employer are familiar, but the context is shifting:
- Unfair dismissal claims if there is no actual redundancy situation created and/or if consultation is unfair, superficial or outcomes appear predetermined
- Failure to consider suitable alternative roles across the business
- Inadequate consideration of employee proposals during consultation, such as job redesign, reduced hours, or hybrid human plus AI working models
- Weak evidence underpinning the business case for change
“Not having a predetermined outcome is going to be key,” Lauren warns. “You can’t just decide at the start you’re replacing five people with one system. You have to test it, prove the data, discuss it with fair and meaningful consultation, and only then implement having taken everything into consideration.”
In other words, it’s not enough to say, “AI can do this now.” You must be able to show why the change is necessary, how it will work in practice, that there is a reduced need for employees to do the specific work, and how you treated people fairly on the way through.
What does a robust AI redundancy business case look like?
A credible business case goes beyond “the software saves money.” Employers should be able to explain – and evidence – that the restructure is genuine, proportionate and workable.
Lauren’s emphasis is on data and proof. If AI reduces the time to complete a process, quantify it. If it improves margins, increases capacity, or prevents price increases to clients, document the rationale clearly and consistently. Critically, employers need to be able to prove that the AI reduces the need for employees to do the specific work. Tribunals tend to find it difficult to challenge evidence that is grounded in tested facts.
But, employers also need to be honest about limitations. AI rarely covers 100% of a role. The remaining percentage is often where the real practical questions sit: if the system does 75% of the work, who does the other 25%? Who monitors quality, corrects errors, manages exceptions and covers downtime when systems fail?
These are exactly the issues employees will raise, and exactly the issues employers should plan for upfront, consider in their business proposals and consult fairly with impacted employees on.
Documentation: what you’d want in front of a Tribunal
If the decision to dismiss an employee is later challenged as being unfair, employers need to be able to show two things clearly:
- The business case was genuine and evidence based, and that a genuine redundancy situation was created, supported by facts, testing and a coherent rationale.
- The process was fair and open minded, including meaningful consultation and genuine consideration of alternatives.
Lauren’s warning is that AI can tempt organisations into speed. But, speed often reads as “done deal”, and that is where risk escalates. Evidence of proper consultation (notes of meetings, recorded consideration of proposals, exploration of redeployment and alternatives, documented reasoning) becomes central.
Employee wellbeing: the “am I next?” effect
Redundancy is difficult in any context. When AI is the driver, it can create a wider emotional ripple, not just for those leaving, but for those staying too. Fear, uncertainty and a sense of disposability can spread quickly: “If the business can replace one team with tech, what stops it doing the same to mine?”
Lauren’s view is that employers must counter this through transparency and communication. Clear messaging about business needs, reassurance that decisions are not predetermined, and visible commitment to fair consultation, where alternatives will be explored, all help reduce the narrative that people are simply interchangeable.
Done properly, the goal is that even if the outcome is painful, people can still say: “I understand why this happened, I was heard, and the process was fair.”
Futureproofing: use AI to redesign work, not just remove people
AI led restructures can also be an opportunity to modernise roles, shifting human effort away from repetitive tasks and towards higher-value work. That might mean reskilling, redeployment, or redesigning roles so that people work with AI rather than being replaced by it.
Handled well, AI can be transformative, creating free capacity for more strategic thinking, better client service and stronger decision making. Handled poorly, it can damage trust and undermine capability.
Senior roles (for now), and the looming pipeline problem
While headlines often imply AI will replace everyone, Lauren’s experience is that organisations still depend on human oversight and judgement, particularly in management and advisory work. “At the moment, employers aren’t taking the risk on senior people and advisory roles. We still need humans to oversee this.”
But that creates a longer term tension: junior roles are often the training ground for future managers, subject matter experts and professional advisers. If entry level and junior opportunities shrink dramatically, businesses may find themselves without the depth of talent needed to lead teams, manage risk or deliver complex work later.
Lauren sees this particularly in legal and other advisory environments: if early career research or paralegal style work is automated away, “where is the talent coming through that’s going to oversee teams?” Today’s cost saving can quickly become tomorrow’s capability gap.
A final warning: don’t automate the human moments
AI can change how organisations operate. It can even change what roles are needed. But, it shouldn’t change the standards of fairness, dignity and human care that underpin responsible restructuring, particularly in the most sensitive conversations. Redundancy consultations must remain meaningful, empathetic and led by people, not systems.
The support Loch can offer
If you’re unsure whether redundancy is the right step, we offer an initial consultation with one of our experts at no charge to help you explore your options and make an informed decision. Please get in touch to arrange a time.
You can also learn more about the redundancy process by watching our webinar here. And, if you’re looking for practical support as you navigate redundancies within your organisation, our Redundancy Support Package provides clear, end-to-end guidance from our team of experts.
