Half of London’s businesses say their workforce does not currently have all the skills needed to meet their organisations’ requirements in the age of artificial intelligence (AI), according to a survey of more than 2,000 business leaders.
The poll, conducted by Survation on behalf of BusinessLDN, found that 50% of firms believed their existing workforce had the necessary skills and capabilities, down from 63% a year earlier.
The proportion of firms reporting significant skills and capacity gaps reached 15%, up from 4% in 2025 and the highest level recorded by the annual survey.
The findings come amid growing use of AI across the capital.
Three-quarters of businesses surveyed said they were already using AI in some form, while only 5% said they had no plans to use the technology.
Among firms already using the technology, 85% said it had changed the skills required within their workforce. According to the survey, businesses reported: “with a greater need for critical thinking, ethical reasoning, and decision-making”.
The survey of 2,043 business leaders from various sectors also found:
- 35% of firms reported some skills and capacity gaps
- A further 12% plan to adopt AI, and 8% are investigating its use
- 60% of businesses with skills gaps lacked advanced digital skills, while 23% reported shortages in basic digital skills
- 78% expect a significant need for advanced digital skills over the next two to five years, up from 66% last year and 56% in 2023
- 13% expect training investment to remain unchanged, and 5% expect it to fall
- 17% of businesses reported no job vacancies
- 20% plan to reduce staff numbers, while 76% do not expect to cut headcount
- Among firms planning job cuts, 25% cited cost-cutting, 24% reduced demand for entry-level staff due to AI, 23% reduced demand for mid-career staff, and 14% the economic climate or business model changes.
Mark Hilton, policy delivery director for people and skills at BusinessLDN, said: “While London businesses are embracing AI, many are finding it challenging to stay on top of their workforce skills needs, given the pace of change
“Positively, employers are responding by increasing investment in training, but to properly close skills gaps, it is essential we have a more agile skills system that is responsive to these rapidly changing needs.”
The survey found a record 81% of firms planned to increase investment in training over the coming year, up from 80% in the previous survey and 69% in 2023.
At the same time, 83% of businesses said they currently had job vacancies. However, the proportion reporting difficulties filling roles had fallen to 32%, down from 46% a year earlier and the lowest level since the survey began.
The survey was conducted between 25 November 2025 and 15 January 2026 and follows recent Office for National Statistics data showing London has the highest regional unemployment rate in the UK.
