Australia’s Largest Bank Admits Fault in AI Layoffs

Australia’s Largest Bank Admits Fault in AI Layoffs
  • calendar_today September 3, 2025
  • Business

In yet another embarrassing turnaround, Australia’s largest lender has been ordered to rehire workers it claimed to have replaced with artificial intelligence. The Commonwealth Bank of Australia (CBA) said it was forced to rehire 45 employees after a tribunal ruled it did not have a legitimate claim that their roles had been made redundant.

The incident, first reported in The Australian, centers on a dispute between CBA and the Finance Sector Union (FSU), which argued that the bank had duped workers and the public about the impact of chatbots. It’s another in a growing series of cases where banks have found themselves in hot water after announcing large-scale plans to automate workers.

The case began when CBA told dozens of workers that they were being made redundant. The bank’s response at the time was that its new AI “voice bot” was handling about 2,000 fewer calls a week, so the roles were no longer needed. Among those affected were many staff members who had been with the bank for several decades.

In response to the job cuts, workers quickly contested CBA’s claims that call volumes were falling and that the bots could replace them. In fact, they argued, call volumes were increasing while management was desperately trying to find ways to plug the gaps and accommodate growing demand.

Staff also pointed to several other contradictions in the CBA story. For instance, while the chatbot was purportedly handling more calls, management was also asking branch managers to work on the call center, including during their off-hours. Meanwhile, employees who stayed were told to work overtime. The bank was also actively hiring in India, which the union said left the impression that its claims about the chatbot were simply a ruse to offshore certain roles.

The case went to a fair work tribunal, where the FSU presented its argument. Not only did the bank fail to properly explain why the roles had been made redundant, it said, but that it was “possibly a case of sham restructuring.” The union said that CBA’s real intention was to offshore some of the roles and that it used the bot announcement as a cover to justify layoffs.

In the tribunal hearing, the bank made an admission. CBA said that in reviewing why roles had been made redundant, it failed to take into account a marked increase in call volumes. Call volumes, it turned out, were still rising at the time the layoffs were announced. Moreover, the spike in call volumes, which CBA has acknowledged, continued for many months. “This error meant the roles were not redundant,” the bank said during the hearing.

After the tribunal, CBA shifted its position. It issued an apology to staff and said it would allow the 45 workers to return to their previous roles, apply for other positions at the bank, or take an exit package. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required,” a spokesperson said, in comments reported by Bloomberg.

The union, in turn, has hailed the outcome of the case as a “massive win for members” who should not have been put through the ordeal in the first place. In reality, though, the damage was already done to many of the workers, who were left waiting weeks for the decision, some in anguish as they feared they could no longer pay their bills. The FSU has said the situation showed how workers can be caught up in a “technology arms race” among banks that rush to implement AI tools at all costs.