AI is coming for white collar jobs while governments strengthen worker protections and businesses quietly prepare for a redundancy tsunami.
For the past few years, governments and unions across the developed world have been locked in a political competition over who can deliver the most worker friendly reforms. In Australia, that has meant cementing the right to work from home in Victoria, expanding industrial relations protections nationally and steadily shifting the balance of workplace power towards employees.
Post-covid lockdowns, the relationship between employer and employee had changed. Lines had been blurred and now unions had a government prepared to back their case. Federal Labor brought in new laws to stop bosses from contacting staff out of hours, and work became an 8 hour daily event.
On top of that came stronger bargaining rights and new workplace protections that have all been framed as wins for modern workers.
Yet while this political theatre unfolds, something far bigger is quietly reshaping the economy beneath it.
Companies across the world are investing billions into AI infrastructure, data centres and automation tools. Every major technology company is building out AI capability. Governments are supporting the construction of massive computing hubs. Businesses large and small are experimenting with automation in everything from customer service to coding.
Every day at Ticker, we conduct interviews with businesses and leaders who explain how they’re leveraging AI to create, grow, and build.
Surprisingly, they rarely acknowledge that this surge in creativity is the result of a large workforce. In fact, the opposite is true.
Many founders we speak with express their ongoing HR frustrations, which keep them up at night. They’re seeking the rapid pace of technological change driven by AI to help alleviate these challenges.
Right now we’re confronted with an activated workforce and businesses desperately trying to grow and increase lackluster national productivity.
And thanks to AI, at some stage soon, these two trends are going to collide.
On one side: a political system promising workers greater protections, flexibility and control.
On the other: a technological revolution designed, quite explicitly, to reduce the need for human labour.
And the events over the past fortnight have shown us that the collision may be closer than most people realise.
Right now, if you’re employed by a big tech firm, your name has probably been discussed and debated by the Department of Efficiency.
The first signs are already visible
Australia’s unemployment rate remains historically low at 4.1%, only slightly above the near 50 year low of 3.4% reached in late 2022. On paper, the labour market still looks strong. I scratch my head sometimes at how that can be, given the face to face, day to day reports I have from business about “letting the team go”.
The detail beneath the unemployment numbers tells a more interesting story.
According to National Australia Bank senior economist Taylor Nugent, who spoke to the AFR, unemployment is increasingly concentrated among white collar workers. Hiring has slowed sharply in professional roles while blue collar industries remain desperate for labour.
In other words, the first tremors are appearing exactly where economists expected them: Office work.
Roles involving analysis, marketing, sales, communication, coding and administration are the easiest for AI systems to assist or automate. Meanwhile the physical economy still needs electricians, construction workers and trades. In fact we can’t get enough of them.
Demand for blue collar workers is so strong that government infrastructure projects and the rapid construction of data centres are creating labour shortages. Let alone the housing shortage.
Ironically, the AI boom itself is creating jobs in some sectors that we currently cannot fill.
But that does not mean the overall employment picture will remain stable.
Far from it.
Corporate behaviour is already changing
In the technology sector, companies are beginning to test what a leaner AI enabled workforce looks like.
Fintech firm Block recently announced it would cut 4,000 employees, roughly 40% of its workforce. Chief executive Jack Dorsey explained the decision bluntly.
Advances in AI, he said, had changed what it means to build and run a company.
According to Dorsey, a much smaller team using AI tools could now do the same work more efficiently.
This kind of statement would have been shocking five years ago.
Today it barely raises an eyebrow.
And for many business leaders, big and small, they’re embracing the word “nimble”. The mass hiring spree during covid to attract talent “just in case they’re needed” was costly and not particularly rewarding for shareholders.
Salesforce has already cut thousands of customer support jobs, with CEO Marc Benioff claiming AI can now perform 30% to 50% of the work previously done by staff. Atlassian announced it would cut roughly 1,600 roles globally, including hundreds in Australia, as it redirects resources into artificial intelligence development.
The pattern is emerging clearly.
Companies are laying off workers in order to fund AI investment.
And markets are paying attention.
When Block announced its layoffs, the company’s share price jumped by 20%. Investors appeared delighted by the idea that a smaller workforce could deliver the same output.
For corporate boards, that is a powerful signal.
In the language of finance, the incentives have just changed. Especially for a struggling CEO.
Investors have discovered a new productivity lever
For decades, productivity gains came from better machines, improved logistics or smarter software.
Artificial intelligence introduces something different: A system that can assist or replace human knowledge work.
When investors reward companies for cutting headcount while increasing automation, it sends a clear message to every executive in the market.
Do more with fewer people, and do better.
We are only at the very beginning of this trend. Where it goes will be fascinating in one way, but heartbreaking for a lot of workers.
But as these systems improve, businesses will inevitably ask a harder question.
If AI can do 40% of the work, do we need 40% of the staff?
It may sound brutal, but it is the sort of calculation corporate strategy teams are already making.
And once a few major companies prove the model works, others will follow quickly.
That is how business cycles behave. Demand for change comes in many forms for business – following the competition, quarterly reports, half yearly earnings, demanding shareholders. But for SME’s – often change is the only option to survive rising costs from everywhere else.
Rising power prices, rents, and borrowing costs are challenging for small business. New rules around HR mean that many businesses now have an incentive to keep headcount low. So AI suddenly presents a solution to the issue of staff costs. With a clear division between employees and bosses spurred on by unions and government decisions, bosses now feel compelled to make significant cuts.
No one wants to be the last company carrying a workforce structure that competitors have already replaced with software.
Governments expect the ACCC to keep big business in check, instead of creating a marketplace where new companies can rise up and force the giants to compete. Here’s an example:
Last Thursday, I witnessed an international media company implementing an idea that inspired me to do something at Ticker. I learned Claude in a night, and spent the weekend building and testing, and by Monday, this (my) world-changing product was rolled out across Ticker. This could have taken them months, staff and money. This demonstrates how small businesses can keep up with big business without the overheads.
Meanwhile, Australia is heading the opposite direction
This is where the situation becomes particularly complicated for Australia.
While technology is pushing companies toward automation and leaner teams, workplace policy has been moving in the opposite direction.
Industrial relations rules are expanding, compliance requirements are multiplying.
Employment protections are growing, and warnings from business lobby groups are largely ignored or laughed off by governments.
For many businesses, running a company increasingly feels like managing a very large HR department with a product attached somewhere on the side.
Small and medium businesses, particularly those without legal departments, are most affected by these changes. They face the same compliance obligations as large corporations but lack the resources to handle them effectively. So many entrepreneurs are turning to outsourcing overseas to delegate tasks that AI cannot perform, rather than relying on local teams.
For years, productivity growth in Australia has been stagnant. Economists have repeatedly warned that the country risks falling behind if it does not improve efficiency. We’ve had roundtables and forums, but the reality is there’s no real desire in the community for people to work harder. Labor was returned with a massive majority last year.
Artificial intelligence may become the tool companies use to overcome politics and productivity woes..
But the transition will be messy.
The uncomfortable middle phase
There is another complication worth mentioning. AI does not always reduce work immediately.
A recent Harvard study examining a technology company found that AI tools actually intensified workloads rather than eliminating them. Workers were expected to produce more output because the tools made tasks faster.
Anyone who has used modern AI software probably recognises this. You finish one task faster, which simply means your boss gives you three more.
So in the short term, AI may increase pressure rather than reduce employment. But the long term trajectory is still obvious.
As tools improve and companies learn how to integrate them properly, the number of people required to run a business will likely shrink.
That does not mean mass unemployment tomorrow, but it does suggest a gradual restructuring of entire industries.
The reckoning nobody wants to talk about
What makes this moment unusual is the silence around it. Politicians are focused on workplace rights and wage growth.
Businesses are quietly investing in automation, not wanting to sound the alarm for fear of legislation. Workers are experimenting with AI tools without fully understanding where the technology is heading.
Everyone is behaving as though the current employment model will remain largely intact but that assumption may prove dangerously optimistic.
If companies discover they can run with 20% or 30% fewer staff while maintaining output, the economic incentives will be overwhelming.
And if investors continue to reward those decisions, the pressure will spread rapidly across industries.
The trouble is, populist government decisions like working from home are also adding an incentive to companies to adapt their staffing policy – if the work can be done from home, can it be done from Vietnam or the Philippines? Or can AI do it entirely?
An AI tool I use regularly suddenly announced over the weekend it has an AI bot that can replace call centre staff. Just fill out a form with all the FAQs you receive from customers, and it will answer customer questions directly, at no cost. You keep a small team for those super tricky requests and that’s it.
Soon only stars will work for private enterprises aligned with the business’s direction and comfortable with their bosses.
We’ve attempted to create “safe workplaces” that has caused a massive schism, with bosses now hesitant to have work drinks or office parties. Alcohol has gone from the office fridge. Perhaps this is a good thing, it’s not for me to say. But all I hear from people who employ people now is them glowing about their virtual assistants instead of their employees.
In a world where employees must be stars, what happens to everyone else? I suspect they’ll work for the government, as history shows how that often ends.
A future we should prepare for
None of this means AI will destroy work entirely. Technology has always created new industries alongside the ones it disrupts.
The construction of data centres, infrastructure upgrades and new technology sectors will generate jobs. Demand for skilled trades may remain strong for years.
But the nature of office work will change.
When I launched Ticker, one of our inaugural shows was titled “30-Life Crisis” hosted by Dr Steve Enticott, who is passionate about people and startups. His show was designed to uplift and inspire individuals in their 30s who had dedicated 15 years to corporate life, building their professional profiles. The show encouraged them to take the leap and embark on their own entrepreneurial journeys. As Steve says” 35 is an often difficult time of life that isn’t spoken about often enough. It’s often the age when people are trying to make big life decisions, while the X on their back continues to grow as companies look to trim costs.”
At the age of 36, I personally experienced this transformation and founded Ticker. I frequently speak with friends, asking them why they haven’t made the same decision. We often share stories about our work experiences. However, from what I hear, there appears to be a lack of motivation to start a business right now. People seem apprehensive about taking the plunge, which is a tragic situation.
Running a business is inherently challenging, and I’ve faced my share of setbacks. Nevertheless, it has undoubtedly been the most rewarding endeavor of my life, and I’ve learned more about people, including myself, than I could ever have imagined. You rarely know human character… until you employ them.
While adequate employee benefits must be protected, there’s a point it becomes completely unaffordable for a small business trying to grow. In the 80s, growth came from the number of employees a business had, now it’s about technology.
We are talking about AI as the future of business, not people. Not the university system. How they are keeping up is the big question here too.
I also believe regulators should create an environment that encourages people who wish to or are compelled to change careers to start their own businesses. This would involve eliminating the burden of complex HR rules and regulations.
If large corporations are now incentivised to reduce staff, governments should instead encourage the growth of small businesses or facilitate the establishment of new companies.
To effectively combat monopolies and duopolies in our country, we should make it easier for small businesses to grow into medium or large enterprises.
The challenge for policymakers is to recognise what is coming and prepare workers for it.
Because if the past few years have taught us anything, it is that technological change rarely asks for permission before arriving. And bureaucrats prefer rules, however silly in hindsight, over common sense.
On Instagram I saw a young office worker post this week “I can’t buy a house, I’m losing my job, and now thanks to eKaren, I can’t even watch p*rn!)
We’ve turned pollies into cable news stars, but the punters aren’t experiencing what they’re hearing from Canberra.
Right now, frustrated businesses are racing toward an AI driven future at a time when governments and unions are still debating how many days people should work from their living room.
At some point, those two conversations are going to collide.
And when they do, the labour market will change faster than anyone is ready for.
It might be time we started talking about that – in our offices, in the halls of power, and especially in our living rooms.
