Australia’s biggest employers are accelerating job cuts as slower economic growth, higher borrowing costs and pressure to improve productivity push companies to reduce expenses.
National Australia Bank is the latest major employer to announce a large restructure, with up to 2,500 positions set to disappear, equivalent to around 6% of its workforce.
The cuts follow major workforce reductions across other banks and large Australian corporations as management teams respond to weaker revenue growth and rising costs.
NAB says the restructuring is designed to simplify operations and remove duplicated corporate functions rather than replace workers directly with artificial intelligence.
However, rapid technological change is increasingly influencing how large businesses think about staffing, particularly across administration, middle management and back-office operations.
Job losses risk feeding slowdown
The concern for the wider economy is that large corporate redundancies can become self-reinforcing.
Workers who lose jobs tend to reduce spending, while employees who fear redundancy may increase savings and postpone major purchases.
That can weaken demand further and encourage more companies to cut costs.
Australia’s unemployment rate has already risen to 4.7%, its highest level in several years, while employment fell by almost 40,000 people in September.
Corporate restructuring is therefore taking place against a labour market that is already cooling.
The risk is that cost-cutting intended to protect individual company profits could collectively accelerate an economic downturn.
For the Reserve Bank, rising unemployment and weaker corporate hiring could eventually reduce inflation pressure.
But if job cuts spread too quickly, policymakers could face a very different problem: preventing higher interest rates from turning a controlled slowdown into something much more severe.
