A Disproportionate Impact: How AI Reshapes the Workforce for Women

The rapid integration of artificial intelligence into the global economy has long promised increased efficiency and innovation. However, a sobering new report released this week by the City of London Corporation highlights the uneven toll this transformation is taking on the workforce. The findings reveal that women in the technology and finance sectors face a significantly higher risk of job displacement due to automation, with approximately 119,000 clerical roles currently in the crosshairs.

As the industry pivots toward AI-driven solutions, the data suggests that the burden of this transition is not being shared equally. The convergence of occupational segregation and rigid hiring practices threatens to widen the gender gap in two of the world's most lucrative industries. For business leaders and policymakers, the report serves as a critical wake-up call: the choice between redundancy and reskilling could define the economic trajectory of the next decade.

The Automation Cliff: 119,000 Roles at Stake

The core finding of the report is stark. Over the next decade, nearly 119,000 clerical and administrative roles within the technology, finance, and professional services sectors are expected to be displaced by automation. These positions—ranging from data processing and compliance administration to scheduling and basic financial reporting—are predominantly held by women.

Unlike creative or strategic roles, which benefit from AI as a productivity multiplier, these clerical functions are often viewed by algorithms as problems to be solved or inefficiencies to be eliminated. The concentration of women in these specific functional areas means that while the tech sector grows, a significant portion of its female workforce is being hollowed out from the inside.

The Financial Case for Retention

While the human cost of displacement is the primary concern, the report also outlines a compelling financial argument for intervention. Companies that choose to make these roles redundant face substantial severance costs. Conversely, the analysis suggests that reskilling affected employees could save businesses an estimated £757 million in redundancy payments.

This creates a paradox where firms are simultaneously paying to dismiss workers with deep institutional knowledge while struggling to fill technical vacancies. In 2024 alone, over 12,000 tech vacancies in the financial and professional services sectors went unfilled. The solution, the report argues, lies in bridging this gap internally rather than seeking external candidates in a tight labor market.

Table 1: The Economic Impact of AI Displacement vs. Reskilling

Systemic Barriers: The "Broken Rung" for Mid-Career Women

The report digs deeper than simple displacement statistics to uncover a more insidious systemic issue: the "broken rung" preventing mid-career women from pivoting into secure, high-growth roles.

Rigid Hiring Algorithms

A major culprit identified is the widespread use of automated Applicant Tracking Systems (ATS) and rigid CV screening tools. These systems are often programmed to filter for linear, uninterrupted career paths. Consequently, "mid-career" women—typically those with five or more years of experience—are frequently penalized for career gaps related to maternity leave or caregiving responsibilities.

Furthermore, these algorithms often fail to recognize transferable skills. A woman with a decade of experience in financial compliance has developed rigorous analytical skills, attention to detail, and regulatory knowledge—all of which are vital for roles in data governance or AI ethics. However, if her CV lacks specific technical keywords, automated screens often reject her application before a human manager ever sees it.

The Retention Crisis

The friction in hiring is compounded by a retention crisis. The report estimates that up to 60,000 women leave the tech sector annually. The primary drivers for this exodus include a lack of advancement opportunities, inadequate recognition, and pay disparities. When combined with the looming threat of automation, this trend threatens to reverse decades of progress in workforce diversity.

Dame Susan Langley, Mayor of the City of London, emphasized the urgency of shifting corporate strategy. "By investing in people and supporting the development of digital skills within the workforce, employers can unlock enormous potential and build stronger, more resilient teams," Langley stated. Her comments underscore a shift in perspective: viewing employees not as static assets to be replaced, but as adaptable capital capable of evolution.

The Skills-Based Solution

To mitigate these risks, the industry must pivot from role-based hiring to skills-based hiring. This approach prioritizes a candidate's aptitude, adaptability, and potential over their past job titles or technical pedigree.

Implementing "Centaur" Workflows

For Creati.ai readers, the concept of the "Centaur" model—human intelligence augmented by AI—is familiar. The transition for clerical workers shouldn't be about replacement, but about augmentation. An administrative professional trained in prompt engineering or AI-driven data management becomes significantly more valuable than a basic entry-level coder.

Strategic Recommendations for Employers:

• Internal Mobility Audits: Identify clerical teams with high institutional knowledge and map their skills to open technical roles.
• Audit Algorithmic Bias: regularly test recruitment AI to ensuring it does not penalize non-linear career paths or caregiving gaps.
• Reskilling Bootcamps: Invest a portion of the potential redundancy savings into targeted training programs for data analysis, cybersecurity basics, and AI literacy.

Economic Implications of Inaction

The stakes extend beyond individual companies to the broader economy. The report warns that failing to close the digital skills gap could cost the UK economy more than £10 billion in lost growth by 2035.

In a global market where AI dominance is a key competitive differentiator, a shortage of skilled talent is a critical vulnerability. By allowing experienced female employees to drift out of the workforce due to automation, the tech and finance sectors are effectively discarding a reservoir of talent that could be pivotal in navigating the AI era.

The irony is palpable: the very technologies threatening these jobs also offer the tools to upskill workers faster than ever before. Personalized AI learning platforms can accelerate the retraining process, making the transition from "at-risk" to "in-demand" smoother and more cost-effective.

Conclusion

The narrative that AI must inevitably lead to job loss is a choice, not a certainty. The displacement of 119,000 roles is a significant challenge, but it is also an opportunity to correct structural inefficiencies in how talent is valued and developed.

For the tech and finance sectors, the path forward is clear. They can continue with rigid, automated hiring processes that widen the gender gap and incur massive redundancy costs, or they can embrace a more dynamic, human-centric approach. By reskilling mid-career women and valuing adaptability over linear experience, companies can turn a potential crisis into a competitive advantage, ensuring that the future of AI is built by a workforce that reflects the diversity of the society it serves.