- calendar_today September 3, 2025
The global banking industry plans to automate much of its workforce in the coming years, but Australia’s biggest lender is already reeling from an embarrassing setback. The Commonwealth Bank of Australia (CBA) has been ordered to rehire 45 workers after it claimed their jobs had become redundant due to an AI project. The bank admitted the layoffs were a mistake after staff successfully appealed the case with the assistance of a union.
Employees have been forced to suffer months of upheaval after their roles were axed by a technology supposedly designed to lighten the workload. Finance Sector Union (FSU) represents workers who lost their jobs in a dispute after the bank failed to properly consult with staff. An internal “voice bot” chatbot was touted as the reason employees were no longer needed, but employees and the union have contested the bank’s interpretation.
The CBA introduced the voice bot in July, touting the AI system’s ability to provide automated support and cut down on incoming calls. It promptly notified dozens of employees that it was making changes to a program for ongoing health and well-being problems. In a report filed to a tribunal over the dispute, the bank said the AI introduction had led to “approximately 2,000 fewer calls per week” and that it was a key reason for the layoffs.
Bank executives claimed the change was “inevitable” because the AI program had cut back on the need for human support. The move was part of a plan to cut down on tasks such as answering routine calls by investing in technology. These employees had been working with the bank for long periods of time, with some having completed 25 to 35 years of service.
But employees pushed back against the claim, arguing that call volumes were higher than ever at the time they were made redundant. While AI cut down on the number of calls, there was still a significant demand for human agents at the time they were let go. The bank’s own internal documentation shows that call numbers were growing at the time of the layoffs, not shrinking.
As the staff appealed their fate, the FSU began a case against the CBA over the decision to lay people off. The union alleged that the bank had not offered a “valid explanation” on how the jobs had become redundant. FSU added that there were indications that the CBA might be looking to transfer the roles to India, including recruitment advertisements for the roles in that country.
Appearing at a hearing in Sydney, CBA was forced to concede that the workers were indeed still needed. One of the reasons cited to claim the roles had been made redundant was wrong, as call volumes actually rose by around 17%. That spike was a “material fact” that bank executives failed to consider, according to CBA’s admission to the tribunal. “This error meant the roles were not redundant,” the bank told the tribunal.
The CBA conceded to the claims, with the bank’s lawyers making the apology to the tribunal. It has since followed up by reaching a deal with the union, reoffering the 45 jobs with an additional four weeks’ pay as compensation. A spokesperson for the bank explained that they had recognized the error and are now willing to work with the union. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required,” the spokesperson told Bloomberg.
The union said the success of the case was a “massive win” for its members, but noted that workers had already suffered from the uncertainty. Some of the staff had been through periods of as much as seven weeks of uncertainty over the job losses and what to do about them. The bank is free to continue pursuing AI projects, including automation, although the decision not to consider workers was a costly error. Even as it retracted the decision, the bank entered a collaboration with OpenAI.
The tie-up, announced just last week, was focused on generative AI products that could help banks prevent fraud and scams. The CBA would also apply them to more specific tasks, such as “personalizing customer engagement and experience.” CBA said the collaboration was a key step to better embed the “responsible use of AI” in the bank. While the partnership is with OpenAI, the bank has also made clear that it views AI as a key to better supporting its employees.
AI in financial services is expected to have a material impact on jobs, particularly back office, middle office, and operations roles. Estimates from Bloomberg Intelligence suggest the global bank workforce could contract by up to 200,000 workers in the next 3 to 5 years. It’s an automation that banks are looking at from a cost-saving and efficiency angle, but the CBA decision could undermine confidence in these AI programs. The bank could face costs too, with the union also suing over a broader decision over the role of AI in the bank.
The current case centers on a very specific incident, with workers at the heart of the AI transition. Some staff are likely to decide they don’t want to work for an organization that tries to lay them off and then retracts the decision. “The damage has already been done,” said the union, arguing the reversal would not repair the injury to workers’ trust. The FSU has said it is also still appealing a second case with the Fair Work Commission, one focused on consultation on the AI transition in general.
