Over Two-Thirds Of Large Oz Companies Cutting Salaries & Laying Off Staff

The Australian Bureau of Statistics (ABS) recently said that Australia’s national unemployment rate remained at 4.2 per cent in August. The number of employed people grew by 47,500, and the number of unemployed people declined by 10,500, in seasonally adjusted terms.

However, a leading global recruitment agency has said that more than 20,000 Australian jobs in the telecoms and financial services sector were sent offshore over the past 12 months. Also, up to 70 per cent of large Australian companies are now believed to be looking to lay-off staff and cut salaries amid cost-cutting measures.

A recent survey from global HR platform Deel was undertaken and covered 250 leaders from businesses with 500 or more employees. Conducted through June and July, it covered executives from the retail, IT and manufacturing sectors.

About 45 per cent of respondents were considering cuts to salary spend, while 41 per cent were looking to lay off staff, reported The Australian.

Telcos such as Telstra already announced plans to axe 2,800 jobs earlier this year and Optus is also undertaking hundreds of job cuts. The media sector has been rocked by large-scale job cuts too. Nine Entertainment announced plans this year to cut 200 jobs.

“Many businesses are understandably cautious amid market uncertainties,” said Deel’s Australia manager Shannon Karaka, adding that companies too were identifying roles that could be automated.

“Businesses are turning to AI in particular as a way to cut costs. By automating manual, repetitive tasks and streamlining operations, companies are finding ways to achieve efficiencies while empowering their people to tackle more valuable activities,” he said.

The survey also found that remote work was “a top strategic priority” for 92 per cent of respondents, who said it helped them reduce costs.

Empty office

As for offshoring of jobs, Talent International Australian managing director Matthew Munson noted that outsourcing to India has grown 7 per cent over the past 12 months, and some firms were seeing as much as a 75 per cent cut in costs.

The offshoring of jobs has meant some companies have begun to set up their offices overseas, while others have relied on offshore firms such as HCL Solutions and Tata Consultancy Services.

Munson contends that the shift of roles overseas posed the threat of further exacerbating the country’s skills crisis.

He notes that as many as a third of contractors have been axed in the past six to eight months. Contractors are often paid a premium of about 40 per cent are hired to work on special projects. As companies now seek to cut costs, these workers have also become the first to be let go.

Job cuts aren’t restricted to the private sector. In May, the federal government announced a plan to save up to $1 billion by hiring more APS staff and reducing its reliance on “expensive non-public servants to perform public servant roles”.