CBA saves 45 jobs after AI redundancy backflip. But we’re not reversing course on tech
Few industries or roles are likely to escape the tech, which is evolving at a rapid clip. The whiter the collar, the bigger the impact.
Just as computing became the springboard from industrial to corporate workplaces, then through the adoption of the internet, and more recent rollout of cloud technology, AI will change everything – including the way customers engage with business.
The tech promises to increase economic resilience for Australia as much as offering a pathway to productivity.
This will come at a cost. Jobs will eventually disappear – particularly in offices – but AI is expected to create new, and different roles. However no one can really answer if these newer jobs will be enough to soak up those whose roles will ultimately be done by an intelligent bot or a data-centre.
In July, CBA briefed the Finance Sector Union about cutting dozens of customer service roles and plans to replace them with its AI-powered bot to take customer calls. This became the first time a major Australian employer cited AI as the reason for pushing ahead with redundancies. The effort was clumsy, lacked awareness and poorly handled.
This week, as chief executive Matt Comyn was locked in three-day economic roundtable with the Treasurer, CBA backflipped on the move. The bank offered impacted staff the option of staying in their roles or taking a voluntary redundancy.
The battle between CBA and the FSU on call centre staffers who faced losing their jobs due to an AI chatbot represented a taste of what’s to come in other workplaces.
Except in this case, the fight wasn’t really about AI.
It was the bank’s botched handling of the situation and failure to recognise the human impact of the job cuts. It shows businesses are still grappling to find its way around unleashing AI for productivity gains while bringing their workforce and also customers along.
CBA acknowledged it did not “adequately consider all relevant business considerations” in assessing the impact of “structural changes” on staff.
“This error meant the roles were not redundant,” the bank said. “We have apologised to the employees concerned.”
The backflip is symbolic win for the unions, and an important moment for staff in the firing line. But for CBA – arguably the most advanced among any Australian businesses in its rollout of AI – this won’t change its strategic direction of its embrace of the technology.
The new AI-powered “voice bot” will remain alongside the call centre staff.
Just this month, CBA doubled down on the tech, signing an exclusive Australian banking partnership with global AI powerhouse Sam Altman’s OpenAI to work around areas like fraud and customer service. The bank is investing billions in technology and the likes of Google, Microsoft and Facebook’s Meta are locked in an arms race, spending hundreds of billions on AI. There’s no going back.
Telstra boss Vicki Brady this year entered into a US-based AI joint venture with Accenture and the telco is one of Australia’s biggest corporate users of Microsoft’s Copilot AI tool. She recently said Telstra’s workforce is likely to be smaller and will look different by the end of the decade than what its today as a result of unlocking the efficiencies of AI. But she says the driving force of adoption built around the question: how can I better serve my customer?
Still, CBA’s Comyn is the most experienced and politically savvy of the Australian banking bosses, so his misstep on AI will be noted by other CEOs.
This certainly means in the future, particularly for CBA, there’s likely to be even more rigorous scrutiny of the human impact of AI as its being deployed. And that’s a good thing.
Companies have been experimenting with AI for the past three years, and now the technology is on the cusp of taking the next step. Australia is a high-cost place to do business, and businesses are under pressure to find efficiencies. AI has promised to deliver this in spades but no one yet really seen this translate to the bottom line.
This is a timely reminder that with any new wave of tech, to keep some perspective around the mooted benefits.
A recent report by management consultant McKinsey & Co said that while nearly eight in ten companies have reported using gen AI in some form – just as many companies are yet to identify any significant bottom-line impact from the technology.
The McKinsey report dubbed this the “gen AI paradox”. This was the imbalance between easy-to-scale AI tech like AI chatbots that deliver difficult to quantify savings, versus trying to secure hard gains in workplace transformation.
CBA’s early work around AI has been largely using it as a customer proposition to speed-up processes to improve response times and loan applications. In the example where the jobs were to cut, CBA earmarked AI as a way to triage ever-increasing call volumes and answer basic questions, to reduce inbound call-waiting times.
But as a cost tool the impact would be harder to measure. In other words, if an AI chatbot saved 1 million hours of call centre staffers time – that’s certainly a big number, but shorter waiting times doesn’t really translate to real savings.
Comyn was this month challenged whether he viewed AI as a cost out or revenue opportunity. He replied “both”. He added there’s a third leg – this was about using it “defensively” combating against fraud and cyber threats.
“We see (AI) as being a cornerstone of being able to support a great customer proposition, but also position the organisation competitively,” Comyn said, Being first in the race is really going to matter over the long term, he added.
In Australia other big banks are using AI tech, but it is still anchored in the back office. ANZ has tapped the tech to help it write vast amounts of code for its new ANZ Plus platform and National Australia Bank is building the “customer brain” to offer a low cost, but bespoke offering.
Comyn has also said AI also delivers different opportunities. The bank has hired 2000 engineers in the past year – easily eclipsing job losses. The bank is training all of its staff to be proficient in cutting-edge tools using Google’s Anthropic and Microsoft-backed OpenAI. On paper, those skills will put them ahead in the open jobs market.
But the fight is still on. The FSU warned the CBA case is just the tip of the iceberg with more so-called “efficiency measures” dressed up as AI or digital transformation are already in play across other workplaces.
The CBA backdown followed an application to Fair Work Australia by the FSU seeking to challenge the move. In many ways, it is lucky that CBA reversed course before having to defend its position at the workplace tribunal.
Ultimately, business also wins from the CBA backdown, in that a legal umpire isn’t making prescriptive calls about how business should be rolling out AI, which could potentially undermining real benefits. However it's a reminder to tread carefully: AI impacts people.
johnstone@theaustralian.com.au
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Some 45 Commonwealth Bank call centre jobs may have been saved, but it’s a drop in the ocean compared to the major workplace upheaval that’s coming. Make no mistake, the artificial intelligence wave is on the verge of breaking and all kinds of jobs will disappear.