Artificial intelligence will replace employees after Budget, warns the boss of British software giant Sage

The boss of one of Britain’s biggest software groups said more and more companies will replace their workers with artificial intelligence (AI) as tax rises announced in the Budget leave them looking for ways to cut costs.

Steve Hare, CEO of Sage, says companies looking to use AI to boost productivity should step up their efforts now.

“That trend towards a more digital economy was already there, but in many ways this (budget) accelerates it,” he said.

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

The company 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 emphasized that Sage did not want to replace its workforce with robots, but instead use its tools to “take people’s work to the next level.”

“We use machines to help our customers work more efficiently and allow them to spend their time where they think 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 1,269.5p – following a 43 per cent rise in profits to £452m for the year to September, thanks to the strong demand.

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

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

Retailers and hospitality businesses are particularly vulnerable as lowering the threshold at which employers start paying national insurance contributions, from £9,100 to £5,000, will affect their ability to employ lower-paid workers.

At the same time, Chancellor Rachel Reeves increased the rate from 13.8 percent to 15 percent.

Investment bank RBC Capital Markets said last week that this could lead to more self-checkouts at supermarkets.

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