This revolution has already seen hundreds of thousands of jobs lost in the United States, and some Aussie roles are now showing worrying signs.
Australia could be “sleepwalking” into a major workforce shift as it lags behind what appear to be clear signs of artificial intelligence (AI) reshaping corporate America.
Data from the US shows S&P 500 companies – the top firms on the New York Stock Exhange – shed 400,000 white collar jobs in 2025, the first annual decline in a decade.
The drop was driven by the likes of United Parcel Service, Amazon, Meta, Oracle and Microsoft, some of which have cut more jobs in 2026 during an ongoing AI shift.
Clinton Free, a professor at the University of Sydney Business School, described the trend of white collar job losses in the US not as a “sudden collapse” but an “erosion”, adding similar signs were emerging in Australia.
“I think Australia is maybe a little bit earlier in (the) curve than the US … but I think we are seeing employment trends starting to point in a similar direction,” he said.
“ … there is cooling demand and some softness in white collar jobs, particularly admin, finance, basic analysis (and) support roles.”
The number of workers at major US firms dropped in 2025 after a decade of growth. Picture: Bank of America/Bloomberg
Professor Free says much of the “over-hyped” claims made by big tech about mass losses should be taken with a grain of salt – but has also crunched job data coming out of America.
He said figures over the past 36 months showed AI was already starting to reshape the US workforce.
He highlighted in arecent article inThe Conversationthat 16.4 per cent of customer support and call centre jobs or 123,700 employees were lost in the US over the past three years, a role held by about 210,000 Australians.
Administration and clerical support jobs were cut by 562,100 in America in that same period, a drop of 6.2 per cent, with approximately 740,000 Aussies employed in those positions here.
The types of jobs on the chopping block in the US. Picture: Supplied
“I think those figures would give a good sense of what may be likely here,” Prof free told news.com.au.
Other industries that had been badly hit in the US were printing and publishing (-82,700 jobs) and software and IT (-101,400 positions).
Aussie jobs ‘susceptible’
Australia’s federal government has said that AI investment poses a potential productivity lift, but also uncertainty for workers.
Employment Minister Amanda Rishworth told theAustralian Financial Review’swork summit the government had done a “gap analysis” on the impact of AI on jobs.
“We are focused on capturing the opportunities presented by AI, ensuring working people share in the benefits, and keeping Australians safe,” she said last week.
Prof Free said the steady decline in manufacturing and retail jobs has seen more Australians working in office roles or fields like education and healthcare.
“And I think we’ve ended up maybe unwittingly building a workforce that might be a little bit more susceptible to job disruptions through AI,” he said.
“There are a lot of Australians employed in things like admin and clerical type jobs, customer support.
“So if what’s happened in the US would happen here, it would see some significant job reductions, which I think would be alarming.”
He said it was possible Australia was “sleepwalking into a problem” and politicians should be on the front foot planning for disruptions when they hit our shores.
As of last week, more than 92,000 tech workers had been laid off globally in 2026, according toindustry tracker Layoffs.fyi, bringing the total to almost 900,000 since 2020.
That included the 20,000 jobs across rivals Meta and Microsoft that were announced the week before. Amazon also said 30,000 jobs would go earlier in 2026.
This year, other major tech firms including Atlassian (1600 jobs), Block (4000 positions) and WiseTech (2000 jobs) all announced significant workforce reductions.
Layoffs.fyi recorded almost 46,000 job losses in March 2026 alone. Picture: Supplied
A study by Mercer this year found 60 per cent of Australian companies believed up to one in five jobs will be lost in two years from adoption by employers of AI.
“Because if you look at jobs in Australia, there’s so many jobs that are AI exposed and automation exposed,” Prof Free said.
“If we move to just automated vehicles and automated truck driving, that would be hundreds of thousands of Australians.
“If we see softness in white collar jobs, that’s millions of Australians that potentially could be impacted by that, and in our context, that would cause a significant social cost if we had even five, 10, 15 per cent of jobs being impacted.”
Bottom rung jobs at risk
Both Jobs and Skills Australia and ANZ have noted a drop in job ads over the past few months, down five per cent in February and 3.5 per cent in March.
Prof Free said that was coming off a high level but said it showed “a convergence of data” was indicating this phenomenon “isn’t just a cyclical move”.
“I don’t think we should panic, but I think what we are seeing is maybe some cooling of demand, a bit more hesitation to hire, (and) I think a harder job market if you’re a young person entering the workforce than in the last couple of decades in white collar jobs.
“If we start taking out the bottom rungs of the white collar career ladder, that is a disruption that is going to play out over time.”
In the US, the unemployment rate for recent college graduates has risen to about 5.6 per cent – above the general rate of about 4 per cent.
For younger graduates it was around 7 per cent with 42.5 per cent underemployed, or working in jobs that do not require a degree.
Jobs and Skills Australia has estimated the “augmentation” of AI would impact three quarters of the workforce, but only four per cent of jobs were at high risk of replacement.
Meanwhile, a recent MIT study found that 12 per cent of all work done in America could now be performed by AI.
But whether or not AI heralds a “jobs apocalypse” remained to be seen, Prof Free said. “Others are saying this is an over-hyped work assistant, basically. And it’s not a meaningful change,” he said.
“I suspect the answer’s obviously in the middle of that.”
How AI is changing the job hunt
Sebastian Scott recently moved from Berlin to San Francisco to run the AI-powered recruitment company he co-founded called Clera.
He said it used an AI agent to act as a “headhunter”, identifying positions that fit a client’s skills and linking them to contacts for an opening that suits.
Mr Scott said tech start-ups were “hiring like crazy” but were targeting recruits in the “sweet spot of having a significant amount of experience, but also a lot of AI exposure they see that everyone can do 10x the output they were able to do before”.
“So a lot of start-ups are now starting to really, really pay incredible amounts just to get this one really good senior person in,” he said.
One notable shift he has seen is that “start-ups won’t hire anyone without AI skills at this point”.
“A typical question for a software engineer would be, ‘what’s your favourite model? What do you use for coding?’
“And if people are like, ‘oh, I don’t like AI’ then they’re immediately out.”
Mr Scott believed the jury was still out on whether major firms were firing staff due to AI uptake or if it was an overcorrection of them over-hiring.
What he has seen was “a growing gap of the types of profiles that are getting jobs in a heartbeat, and then others that are just struggling”.
“I think one of the main problems we’re seeing is a lot of ghosting. So people just not hearing back at all,” he said.
“And I think at some point people just get very frustrated when they send out 500 or 1000 applications and just don’t hear back. They lose hope.
“My personal take is that there’s going to be a ton of mobility in this space. So the people that are most adaptable will be the most successful in the years to come.”
