Job Reductions Accelerate Globally, Fueled by AI and Strategic Shifts
Major companies in Australia and globally have announced thousands of job reductions, with many attributing these decisions to advancements in artificial intelligence (AI) and strategic shifts towards AI-driven operations. This wave of workforce adjustments is creating widespread concerns regarding the future of employment, particularly for white-collar roles.
While companies cite technological transformation and efficiency gains, some critics suggest that earlier over-hiring may be a contributing factor, labeling certain justifications as "AI-washing."
The workforce adjustments are accompanied by both corporate retraining initiatives and the broader challenge for individuals and industries to adapt to a rapidly evolving technological landscape.
Widespread Job Reductions Across Sectors
Several prominent companies have announced significant workforce changes, frequently citing AI integration as a primary driver.
-
Block (Square, Cash App, Afterpay)
The U.S. payments company announced a global reduction of over 4,000 positions. Block CEO Jack Dorsey cited rapidly improving AI models as a primary driver, aiming to become a "smaller, faster, intelligence-native company." Nick Molnar, co-founder of Afterpay and Block's global head of sales and marketing, defended the cuts as reflecting a genuine technological shift. Following the announcement, Block’s stock increased by up to 24 percent. -
WiseTech Global
The technology company announced a reduction of 2,000 jobs, representing nearly a third of its workforce across product development and customer service. CEO Zubin Appoo cited advancements in AI models, including Anthropic’s Claude Opus 4.5 and OpenAI’s latest models. The company's shares increased by nearly 11 percent following the announcement. -
Atlassian
The Australian software company announced a reduction of approximately 1,600 global positions, accounting for 10% of its workforce, with 480 roles affected in Australia.Co-founder Mike Cannon-Brookes stated the decision aligns with a strategic focus on AI and enterprise sales, acknowledging that AI influences the mix of skills required.
The company anticipates pre-tax charges between US$225 million and US$236 million related to these layoffs. Concurrently, Atlassian is seeking tenants for its 38-story "Atlassian Central" office tower in Sydney, which is under construction and scheduled for occupation by 2028. -
Commonwealth Bank (CBA)
The bank confirmed 300 job cuts. Simultaneously, CBA launched a $90 million "Future Workforce Program" to retrain staff for emerging roles in areas such as financial crime, digital risk, and data engineering, with CEO Matt Comyn emphasizing transparency and opportunity during the transition. -
Telstra
The Communications Workers Union accused Telstra of "offshoring by stealth," raising concerns about plans to shift technology development and AI delivery capabilities to foreign contractors. Telstra is implementing an AI-focused overhaul, expecting a smaller workforce by 2030 due to automation, with up to 650 roles cut and hundreds potentially offshored to India. -
LinkedIn
Natalie MacDonald, a former employee, reported her role elimination was attributed to a company-wide restructure driven by investment in artificial intelligence. -
Global Companies
This trend extends globally, with companies such as Amazon (16,000 corporate cuts), Dow Chemical (4,500 roles), Autodesk (1,000 jobs), and HP (up to 6,000 positions by 2028) also announcing significant job reductions linked to AI and automation.
Stated Rationales and "AI-washing" Concerns
Companies like Block and Atlassian have described their workforce reductions as necessary steps for structural transformation, increased efficiency, and strategic investment in AI. Block's Molnar stated that "the AI piece is real," highlighting the rapid advancements in AI tools. Atlassian's Cannon-Brookes clarified that the approach is not "AI replaces people" but acknowledges changes in skill requirements.
However, skepticism has been expressed regarding these justifications.
OpenAI chief executive Sam Altman has used the term "AI-washed" to describe companies that attribute layoffs to AI rather than earlier over-hiring.
A former Block employee described the announcement as “a workforce correction wearing an AI costume,” suggesting the AI rationale may serve as a pretext.
Impact on Individuals and Community Support
The job reductions have had direct impacts on individuals. Thomas Burt, a Sydney-based voiceover actor with 15 years in the industry, reported losing a contract after his voice was cloned by AI, leading to a significant loss of income and negative mental health impacts. Natalie MacDonald, redundant from LinkedIn after seven years, noted the disruption for professionals.
In response, community efforts have emerged. Senior technology leaders, including Block alumni, have mobilized networks on platforms like LinkedIn and private Slack channels (e.g., "Square Mafia," with nearly 3,800 members) to assist displaced colleagues with job referrals, severance advice, and support. Natalie MacDonald has launched a consultancy to assist professionals, particularly mothers and caregivers, in navigating career transitions.
Broader Economic and Expert Perspectives
The broader impact of AI on the workforce is a subject of ongoing discussion:
-
Job Displacement Concerns
OpenAI CEO Sam Altman predicted that "entire classes" of jobs, such as customer support, could disappear. Anthropic CEO Dario Amodei suggested AI might eliminate half of all entry-level white-collar jobs within five years. -
Economic Analysis
Westpac chief economist Luci Ellis indicated that concerns about mass unemployment might be overstated, noting that clerical and administrative work are more susceptible to AI automation than caring occupations or trades. Historically, new technologies have reduced employment in affected industries while overall economy-wide production and employment have risen. -
Australian Preparedness
UNSW Professor Toby Walsh warned that Australia is largely unprepared for an AI-driven future, citing a lack of investment, regulation, and independent expert advice. He noted global declines in job postings for graphic designers (33 percent), photographers (28 percent), and writers/copy editors (28 percent) in 2025 compared to the prior year. -
Worker Sentiment
A Randstad Workmonitor survey indicated that one in three Australian workers believes their job will be affected by AI within five years, and a similar proportion reported worsened job prospects. Fewer than half of Australian workers stated they had received training on AI tools, suggesting a potential "AI skills cliff." -
Potential for New Roles
Dominic Price, a work futurist, suggested that while business leaders initially focus on AI for productivity and cost reduction, it could foster new business opportunities and facilitate staff redeployment in the medium term. Michael Wright of the Electrical Trades Union argued that the physical infrastructure required for AI, such as data centers and energy systems, could generate substantial demand for skilled Australian workers.
Regulatory and Strategic Responses
Australia currently lacks a comprehensive national law governing AI in the workplace. The Australian Council of Trade Unions (ACTU) national secretary Sally McManus stated that existing awards or enterprise agreements typically require consultation with employees when major changes, like new technology introductions, are likely to have a significant impact.
The ACTU intends to increase pressure on employers to fulfill this legal obligation regarding AI implementation.
Thomas Burt advocated for greater transparency in data systems regarding AI inputs.
Companies are also responding strategically. Block is preparing for the Australian launch of Square AI, a conversational AI assistant integrated into the Square platform, which will be offered free to local Square sellers. This tool allows merchants to analyze data using plain language queries. CBA's "Future Workforce Program" is an example of a company combining job adjustments with significant retraining investment.