Artificial intelligence will replace workers after the budget, warns the boss of British software giant Sage

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

Steve Hare, CEO of Sage, says companies that want to use AI to increase productivity should now step up their efforts.

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

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

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

Hare emphasized that Sage did not want to replace staff with robots, but rather 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 an all-time high – up 17.9 per cent, or 192.5p, to 1,269.5p – after a 43 per cent rise in profits to £452m of pounds sterling for the year to September thanks to strong demand.

The group also encouraged investors by revealing plans to buy back £400m of its own shares.

Business leaders and analysts have warned that rising costs due to the Budget would lead to greater use and automation of AI, putting jobs at risk.

Retailers and hospitality businesses are particularly vulnerable as reducing the threshold at which employers start paying national insurance contributions from £9,100 to £5,000 affects 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 this could mean more self-scanning checkouts at supermarkets.

Earlier this month, Allison Kirkby, boss of telecoms giant BT, warned the company would make “harder and faster” cost cuts to counter the tax rise, including more artificial intelligence and automation to improve productivity.