Telstra redundancies, AI robots come in, the future is now

24 May 2024

Australia’s largest telecommunications company, Telstra, announced this week it was making about three thousand employees, or ten percent, of its workforce redundant. About three hundred people were sent home straightaway — hopefully with some sort of pay-out — while the remainder will depart between now and the end of the year.

This is terrible news for those who will now be looking for new work, at a time when the seasonally adjusted Australian unemployment rate has also been rising. Telstra cites the need to cut costs, and claims the mass layoffs will produce savings to them of three-hundred-and-fifty-million dollars.

The thing is, when cuts are made to the workforce — allegedly in the name of saving money — the work once carried out by the three-thousand people who have been let go, does not necessarily evaporate. Accordingly, in the past companies laying off large numbers of staff have out-sourced some of this work to lower-cost providers.

Or, have said advances in technology will make up for the shortfall in staff. In this instance however, advances in technology includes the deployment of Artificial Intelligence (AI) powered software:

“AI and cloud computing and robots, you know they can be far more efficient and effective in the network,” telecommunications consultant Paul Budde said. “So therefore, what you start seeing is absolutely replacing humans [with] this new technology … that is seriously happening.”

Telstra’s move has stoked fears of a wider adoption of AI “solutions”, for companies looking to reduce their headcount. It could be argued the Telstra situation is a one-off. The telco’s customer base has been declining for decades as people make use of internet based call services, and move away from landline phones. Other Australian companies, therefore, especially large enterprises, are likely not quite facing the same challenges as Telstra.

But does that mean they’re not looking at the cost-cutting potential of incorporating more AI technologies into their operations? That, unfortunately, remains to be seen.