Opinion
The highlight from Australia’s road to AI job carnage last year was Matt Comyn’s Commonwealth Bank hitting a pothole and having to reverse call centre job cuts that were meant to have been irreversibly crushed by the rising tide of AI capabilities.
There will be no such reprieve for the 300 workers the bank laid off in an announcement last month, as it also unveiled a new plan for helping workers adjust to AI-driven workplace changes.
But as the Ides of March approached this year, it was some of Australia’s biggest tech success stories that were ready to give thousands of their employees a bitter taste of AI reality.
It started last month with logistics software titan WiseTech announcing that up to one-third of its workforce would be cut. New CEO, Zubin Appoo, declared that the era of manually writing code as a core job activity is over.
“We’re halving the human capacity, but we’re significantly increasing the overall capacity through agentic AI,” he said.
That same week, Afterpay owner Block unveiled a 40 per cent staff cull – around 4000 employees globally, including Australia.
“Something has changed,” Block founder and CEO Jack Dorsey said in a post with all lower-case text, obviously designed to convey that even an eccentric Silicon Valley billionaire understood the gravity of the situation.
“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. And that’s accelerating rapidly,” he said.
The clear message is, AI is eating the sort of coders that brought it to fruition. FOBO – “fear of becoming obsolete” because of AI – has become a real concern for tech workers.
It is a taste of the coming era of what Anthropic co-founder Dario Amodei calls “a country of geniuses inside a data centre” – a reference to his prediction that AI models will surpass human cognitive abilities in most tasks by next year.
But this week, an ashen-faced Atlassian co-founder Mike Cannon-Brookes, had a slightly different take on the theme of AI dominance, as he announced 10 per cent of its workforce, or 1600 workers, are casualties of the AI revolution.
“We fundamentally believe people and AI create the best outcomes. Our approach is not ‘AI replaces people’. But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas. It does,” Cannon-Brookes said.
His sobering video was the most honest of the three when it comes to stating what was actually driving the job cuts: money. Amodei’s “country of geniuses inside a data centre” is not to blame just yet.
To focus on Atlassian first, the last thing that Cannon-Brookes can afford to admit is that his company is replacing its tech workers with AI.
The existential threat that has sent its stock price plummeting over the past year by more than 60 per cent, and slashed billions from his net worth, is the very idea that Atlassian’s customers will be able to replace their workers with AI and reduce the number of workers who need Atlassian’s products.
In a worst-case scenario, who needs Atlassian’s tools to track software development if it’s all done by AI?
Cannon-Brookes admitted that one of the main reasons for the loss-making Atlassian to cut workers is so it can spend more adapting its products to AI, before AI native rivals eat its lunch.
As one tech veteran put it: “Atlassian isn’t replacing workers with AI. AI-native tools and vibe-coded apps are replacing Atlassian.”
So, where does that leave WiseTech and Jack Dorsey’s Block, which aggressively advocated for the idea that AI could make huge swathes of their respective workforces redundant? It may have more to do with how AI is hitting their stock prices.
To critics, it is nothing more than AI-washing – a term that describes companies that use the new technology to provide cover for cuts to bloated tech workforces.
Let’s start with Dorsey’s Block because, well, Dorsey’s corporate style needs some explaining.
Last October, he flew in his 10,000-plus workforce to the mother of all staff parties in California, which was so over the top – Block investor and board member Jay Z was on the guest list – that its $100 million financial imprint was unmissable in the company accounts.
Zachary Gunn, a senior analyst at Financial Technology Partners captured the investor sentiment perfectly when the numbers were revealed in Block’s accounts late last year: “It’s hard to take a company seriously regarding reaching bottom-line targets when it’s spending ~$US70m on a large-scale event for employees.”
Gunn’s views on the recent job cuts were no less withering.
“When I look at the overall employee number, this is more about the business being bloated for so long than it is about AI,” he said.
Keep in mind that Elon Musk managed to cut 80 per cent of Twitter (now X) when he acquired the business and Dorsey exited the building.
The key numbers at WiseTech are just as important.
Last year, WiseTech made its biggest acquisition, buying the embattled e2open for $3 billion.
A crucial detail is that while the US logistics solutions group was just a fraction of WiseTech’s market valuation, it walked in the door with more employees than its new parent.
Last year, e2open had 3900 staff. WiseTech had 3300 employees in 2024 and the combined group had 7000 when the cuts were announced last month. Cutting 2000 employees from a combined group with a lot of skill overlaps should not raise a sweat – whether AI is displacing jobs or not.
Even Amodei – in his most recent essay on AI’s impact – said AI is “likely not” displacing jobs right now.
This view is backed by Aussie job search group, Seek.
“Job ads across the board have been stabilising over recent months, after a long period of slow decline from mid-2022 onwards. There is nothing our data currently shows that points to any specific decline at the role or industry level as a result of AI,” a Seek spokesperson said.
But Amodei warns that the apocalypse is coming, as per his famous prediction from last year that it will replace entry-level white-collar jobs in the next five years.
Previous technology shocks only impacted a small range of human abilities, leaving higher tasks for humans to reach for. This may no longer be the case, he argues.
“Another way to say it is that AI isn’t a substitute for specific human jobs but rather a general labour substitute for humans,” he says.
But what will happen to these tech workers who will be the first to find their skills redundant?
This week, an alternative AI career path emerged from the world’s largest asset manager, BlackRock, which announced it would invest $US100 million to address the professional shortages in the US, which threaten AI’s growth: Electricians, plumbers, ironworkers and heating, ventilation, and cooling systems technicians.
“America needs an estimated $US10 trillion in infrastructure investment by 2033 to modernise ageing systems and build new energy, digital, and AI infrastructure. Capital alone is not enough – people are central to building our nation’s future,” BlackRock chairman and CEO Larry Fink said.
It sounds a world away from Jay-Z, foosball and free lunches.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
