Australia's CBA halts AI-driven layoffs amid union pressure

Australia's Commonwealth Bank has walked back a decision to replace 45 customer service jobs with artificial intelligence.

Instead of cutting the 45 roles, the bank is now offering the affected workers the option to stay or take a voluntary buyout. The decision, disclosed by the Finance Sector Union, highlights the growing tension between rapid AI adoption in banking and its impact on employment, a challenge U.S. financial institutions also navigate.

In July, Commonwealth Bank told the union, which represents roughly 22,000 Australians, that it would cut 90 roles, including 45 positions the bank planned to replace with a new AI-powered voice bot system on its inbound customer inquiries line.

The bank had told the union that its AI customer service agents had been reducing call volumes for human workers. Based on feedback from its members, the union disputed the claim.

Commonwealth Bank did not immediately respond to a request for comment.

The union heralded the change in course as "a massive win for workers," demonstrating the power of collective action, according to a press release.

However, Finance Sector Union's national secretary Julia Angrisano cautioned, "this is no victory lap," warning that the "fight to stop Australia's biggest bank replacing people in secure jobs with machines is far from over." The union continues to collect reports from members regarding the impact of offshoring, automation, and AI on workloads and job security.

Generative AI, the label for the technologies that underpin products such as AI customer service agents, will enter what is known as the "trough of disillusionment" this year, according to a Gartner analysis of what it calls the hype cycle of AI.

Following a period of huge investment in AI technologies, Gartner said AI leaders now face challenges proving the value of generative AI to the business.

"Despite an average spend of $1.9 million on GenAI initiatives in 2024, less than 30% of AI leaders report their CEOs are happy with AI investment return," reads the Gartner report.

Like some large U.S. banks, Australia's Commonwealth Bank has openly pursued a broad AI strategy. The bank recently opened a tech hub in Seattle to attract and train professionals in generative AI and agentic AI, positioning its office close to technology partners Anthropic and Amazon Web Services.

CBA also partnered with OpenAI earlier this month to explore advanced generative AI solutions for scam and fraud detection and personalized customer services.

The bank has credited generative AI for significant reductions in customer scam losses, customer-reported fraud and a 40% reduction in call center wait times through its AI-powered messaging app.

Commonwealth Bank's other AI moves include a collaboration with JPMorganChase, combining AI products to mitigate mistakes and fraud in cross-border payments.

The Finance Sector Union has advocated for new technology and AI in banking but insists it must occur in partnership with workers, not at their expense.

"Workers want a tech savvy bank, but they expect to be part of the change, not replaced by it," Angrisano said, who urged investment in training and support for employees into new, AI-leveraged roles.

The union said the bank backtracking on its decision to cut the 45 roles came as a result of employees pressuring the bank to reverse its decision. Union members had brought the dispute over the cuts before Australia's Fair Work Commission.

As unions have weakened in the U.S. in recent decades, so have they down under. Peak union membership in Australia was 40% in 1992.

Today, union membership in Australia is broadly stronger than in the U.S., with 13.1% of workers being a member of a union as of August 2024, according to the Australian Bureau of Statistics. Compare that to 9.9% in the U.S., according to the U.S. Bureau of Labor Statistics.