Hong Kong Slashes Civil Service Jobs, Invests in AI to Combat Deficit

Hong Kong will cut thousands of civil service jobs and increase investments in artificial intelligence to address its growing deficit. Finance Secretary Paul Chan announced a 7% reduction in government spending and emphasized AI as a key sector for future growth.

In an effort to tackle an escalating deficit, Hong Kong authorities announced a strategic reduction of civil service jobs and a substantial boost in artificial intelligence spending. Finance Secretary Paul Chan revealed a 7% reduction in government expenditure from now until 2027-2028.

The city faces a deficit of 87.2 billion Hong Kong dollars for the 2024-2025 financial year. To counterbalance the fiscal woes, Chan detailed a plan to cut 10,000 civil service positions by April 2027 and freeze civil servant salaries this year.

Apart from workforce reductions, Hong Kong plans to raise airport departure taxes and issue bonds to fund infrastructure projects. Furthermore, the city aims to position itself as a global AI hub, earmarking funds for AI research, in response to a decline in property sector revenues and ongoing geopolitical tensions.