‘Perfect storm of costs’: Why Aussie companies are laying off thousands of workers

• Major Australian employers, including Qantas, NAB, and Canva have announced thousands of job cuts in the past month.
• About three in four firms in the RBA’s business liaison program say AI hasn’t changed their staff numbers, according to RBA Assistant Governor Sarah Hunter.
• An expert told The Money Edition it is “too convenient” to describe every restructure as an AI decision.

News of Qantas’ 850-strong job cuts dominated headlines yesterday, but experts say artificial intelligence (AI) is copping more of the blame than it deserves.

Chief executive Vanessa Hudson broke the news to staff in an internal email seen by The Money Edition, saying the airline’s new IT deal would shift hundreds of roles to India-based teams, with the first changes in place by mid-2027.

The airline joins National Australia Bank (NAB) and Canva in announcing major cuts within the space of three weeks, as a subdued economy and climbing costs push businesses to rethink who does corporate work, and where.

“We’re seeing a perfect storm of economic headwinds, wage and operating cost pressures, and consumers being more careful with discretionary spending,” Troy Gread, founder and principal at Workvergent, told The Money Edition.

He said corporate functions were “coming under scrutiny because technology and offshore providers give employers more options for how that work gets done.”

“I think we’re seeing a structural shift,” Rhiannon Howard, a human resources and industrial relations consultant at Industrial HR, told The Money Edition, with businesses splitting up roles and choosing which tasks stay in Australia, which go offshore and which get automated.

“Cost and complexity in the Australian market is doing more of the driving right now,” she said.

Corporate Australia’s redundancy month from hell

Last month NAB announced plans to shed up to 2,500 roles, but pressure from the Finance Sector Union has since pushed any forced redundancies back to January 27, 2027.

Westpac has also trimmed about 250 roles since early October, while insisting AI was not behind its most recent round of redundancies.

Subscribe here for our FREE Tuesday and Thursday newsletter

Email address

Subscribe

Last week, Canva announced it is shedding 1,271 staff, more than a fifth of its workforce, energy giant Woodside said it would axe more than 500 roles worldwide, and retailer David Jones collapsed into administration, putting thousands of jobs under threat.

Is AI really to blame?

In a public statement, Qantas said modernising its more than 1,000 legacy applications, built up over decades, and connecting the data across them would help “accelerate the Group’s use of AI.”

Meanwhile, the Reserve Bank of Australia (RBA) is yet to see AI cost jobs at most firms, with Assistant Governor Sarah Hunter telling a Sydney conference on Monday that about three in four businesses in its liaison program had seen no change in staff numbers due to AI over the past year.

RMIT University economics professor Chris Berg told The Money Edition that “for all the excitement about AI, there’s actually a surprising lack of evidence that it is seriously affecting the labour market.”

“There’s no doubt that major changes to the economy are coming,” Berg said, adding that with routine work like administration set to be “very different in a few years,” everyone would have to adapt to “a world where white-collar work can be automated.”

Gread said “it is too convenient to describe every restructure as an AI decision,” with some cuts reflecting “a familiar commercial calculation: can the work be done more cheaply somewhere else?”

Howard said AI was allowing more work to be standardised or automated, and expects it “to drive more decisions about how many people a team needs” over time.

The entry-level squeeze

Berg said the real challenge was getting young workers into jobs, since “it has traditionally been routine work that characterised early career employment.”

Those entry-level jobs are also Howard’s “biggest concern,” since routine tasks like reconciling accounts and pulling together campaign reports are how people learn “what to look for and when something needs a closer look.”