Experts warn Australian banks are losing institutional knowledge and trust as restructures outpace strategic workforce planning
Australia’s major banks are cutting jobs at a pace not seen in years. HR experts warn the sector may be losing the institutional knowledge it will need to manage the artificial intelligence (AI) and automation behind many of the cuts.
National Australia Bank (NAB) announced in October that it would cut up to 2,500 jobs, or about 6 per cent of its workforce, with up to 1,500 roles going by the end of the year and $300 million booked in restructuring costs. Chief executive Andrew Irvine said there would be no material impact to customer-facing banking roles.
The announcement extends a run of banking job cuts that began when Australia and New Zealand Banking Group (ANZ) planned to cut 3,500 jobs by September 2026, alongside fewer consultant engagements, at a cost of about $560 million before tax.
A day later, NAB moved to cut 410 technology jobs. In that story, NAB’s cuts to its technology and enterprise division, the Finance Sector Union (FSU) said the bank was also looking to create 127 new roles in India and Vietnam.
Westpac was also recently announced the cutting of over 100 jobs as part of its "Catalyst" resutrcuture.
The Commonwealth Bank of Australia (CBA) cut 300 jobs in February 2026 while announcing a $90 million plan for an AI-ready workforce. It later moved to make nearly 200 technology workers redundant. Earlier, it reversed a decision to cut 45 customer service jobs amid growing use of AI, conceding the move was an error. Australia's largest lender's job cuts have reached 1,000 for 2026.
Why are banks so exposed to job cuts?
Beth Hall, founder and director of Culture Edge, said the scale of the cuts reflects strategic workforce planning that came too late. Organisations that plan ahead can use attrition and voluntary exits to resize gradually. Those that don’t end up with bigger problems and, in turn, bigger layoffs.
Banks face the same cost pressure as most employers. According to Hall, they are unusually exposed because so much of their back-office processing and administration is high-volume, standardised work that suits automation. Customers have also moved to digital channels, which changes what banks need from their workforce. Regulatory demands and investor expectations add to that pressure.
None of this should have come as a surprise, she said. “AI is not new. We knew it was coming. Why did we not think about these things?”
Keyia Burton, senior director analyst in the Gartner HR practice, said this wave differs from earlier cost-cutting cycles, which mostly removed layers or answered economic pressure. Today, organisations are redesigning work around AI, automation and new skill requirements.
“The question is no longer just, ‘How many roles do we need?’ It’s increasingly, ‘What work needs to be done, what skills are required, and how should work be organised?’” she said.
The hidden cost of tacit knowledge walking out
Hall said boards often look first to the workforce because it is the fastest line in the budget to change. What is usually missing is a workforce plan to go with the cost target. “I’m not suggesting that leaders don’t care, but we’re pulling the lever too quickly,” she said.
The damage often surfaces years later. Long-tenured employees are frequently the ones who take redundancy packages, and with them goes the judgement and organisational history that newer staff rely on. Hall noted that automation and offshoring do not remove the need for that context. Someone still has to check that what an AI system or an offshore team produces is right for the business.
She added that few organisations track a restructure’s outcome over 12, 18 or 36 months to see whether the savings were real. Without that tracking, they can’t tell how much productivity or knowledge was lost.
Trust is the first casualty
The cuts also carry a leadership cost. Gartner research found employees are significantly less likely to trust senior leaders if, in the past 18 months, those leaders made workforce reductions or restructured in ways that affected employees’ roles. A Gartner survey of more than 3,500 employees found less than half (48 per cent) trust their senior leaders.
Burton said the risk is sharpest before decisions are final, as when Bendigo and Adelaide Bank proposed cutting 137 jobs in September 2026. Leaders often hold back to avoid confusion. Burton argued the bigger danger is an information vacuum, because staff fill the silence with their own explanations.
Her advice is to be clear about what is known, what is still under review, and when the next update will come. “Employees often tolerate uncertainty better than silence,” she said.
She said the employees who stay also need attention. They often face heavier workloads and their own doubts about the future, and they need to see a strategy that goes beyond the cuts themselves.
What should HR leaders do first?
In the first 48 hours, Burton recommends equipping managers before staff hear the news. Leaders should also create channels for questions and remain visible after the announcement. “The most common mistake is treating restructuring as a communications exercise rather than a leadership moment,” she said.
Hall urged HR leaders to begin with a three-to-five-year business strategy. From there, they should map where human judgement adds value and where automation fits, and only then decide whether to redeploy, retrain or exit. Reskilling existing staff into growth areas is often easier than hiring new people, she said. “I wouldn’t focus on roles, I would focus on the work.”
