Updated ,first published
The government and a key union have blasted Qantas over the decision to outsource 850 jobs, while raising concerns the airline – or any company – could use AI disruption as an excuse for mass firings.
Describing the outsourcing move as part of the business model for Qantas, Transport Minister Catherine King said: “This has been a model that Qantas has been using for some time, outsourcing jobs, no longer having them in-house.”
Qantas said on Tuesday it would eliminate 850 local jobs, and send them to professional services firm Accenture, to “modernise its back-end systems, processes and data”, with back-office functions “mostly” shifted to India.
The Australian Services Union, representing some of the affected Qantas workers, expressed scepticism over Qantas’ motives. “We need to make sure that these AI announcements and job cuts are genuine and not a Trojan horse for widespread offshoring,” assistant national secretary Scott Cowen said.
“This isn’t the first announcement we’ve seen by big corporate giants in Australia where they announce a deal with a big tech giant like Accenture,” he said, citing examples such as Coles and Telstra.
Cowen expressed concern that “AI” is being used as a cover for simple offshoring.
“Is this using AI as the excuse to say the work can’t be done internally because it’s new or too specialised? And then [using] that as a way to outsource jobs from local communities?”
On Tuesday, chief executive Vanessa Hudson said: “Reinvention at this scale is not possible to do on our own … because we cannot hire at the pace this work needs.”
Cowen said that more broadly: “If a huge corporation like Qantas is saying that it can’t internally employ people as these new technologies are implemented … then what company is going to be employing locals?”
There is a pattern of Australian companies making these announcements invoking AI change, but resulting in layoffs, he said. The airline said outsourcing the roles through Accenture will see certain in-house processes being sent to India, where they will be analysed and simplified. Automation will be added, and then the process will be reincorporated into Qantas’ Australian operations at a later date.
“I think that we saw the last time that it engaged in this sort of level of outsourcing during COVID, that it did a significant amount of damage to its social licence,” King said on the ABC.
“I think the union is right to be disappointed that it’s resulting in 850 job losses.”
She questioned outsourcing AI-related work to another country. “I think investing in the workforce that has basically built it should be a priority for Qantas.”
Qantas said that, even with the outsourcing plan, it remains a net employer, with a growing 28,000-strong Australian workforce. Qantas has added more than 4400 new operational roles since 2023, including pilots, cabin crew and engineers.
The airline’s prized place in corporate Australia as a provider of essential connectivity saw it receive $2.7 billion in taxpayer subsidies during COVID, to support employment and keep the airline functioning. Around the same time, Qantas outsourced 1800 ground crew in a move later ruled as illegal, triggering multiple fines and doing substantial damage to its public image.
More recently, the Albanese government has worked closely with Qantas, in helping it secure jet fuel from Asian ports in the aftermath of the Iran-US conflict this year. The Albanese government has also protected Qantas from full exposure to deep-pocketed Qatar Airways’ ambitions to fly to Australia.
The ASU said when the prospect of the back-office modernisation project became known, Qantas had “told us directly there was no plan to offshore any jobs”.
Qantas denies the claim. “We have never given assurances to the union that some jobs wouldn’t move offshore,” it said.
Nevertheless, in the email Qantas CEO Hudson sent to staff on Tuesday, it said: “We will look to redeploy as many people as possible.”
While laying off people working in back-office operations, Qantas recently opened a product innovation centre in Adelaide, where apps will be built for the front-end customer experience.
It currently employs 70, of which 65 per cent are recruited in South Australia. The company has plans to scale it up to 400 staff.
Ex-Qantas ground crew worker Ryan Perrett, one of 1800 people who were illegally sacked as Qantas outsourced the roles, said that the airline “obviously has learnt nothing” from the court case.
Minister Catherine King said: “My call to them is to work very closely with the unions to retrain, redeploy as many of those 850 people as possible because we need those AI capabilities here in Australia as well.”
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.