Macquarie warns Australia’s big four banks could replace 30 per cent of staff with AI in next five to 10 years

Australia’s four biggest banks could use to artificial intelligence to slash their workforces by up to 30 per cent over the next five to 10 years, amid a wave of redundancies forecast to hit office jobs in Australia, according to Macquarie Group researchers.

Mass redundancies at the banks would initially target offshore workers and contractors, Macquarie said. The banks would rely on natural attrition to reduce Australian workers to avoid a political firestorm from using AI to replace humans.

“While there have only been a few cases, so far, of large scale AI driven restructuring, it’s becoming clear that AI will have the technical capability to significantly augment, if not potentially replace, many white collar jobs,” Macquarie said.

“Given significant household debt levels, we see AI-driven labour market disruption as the greatest tail risk for the Australian banks from rapid AI adoption.”

The investment bank’s researchers estimated the banks could axe anywhere between 10 and 30 per cent of full-time employees over the next five to ten years to save between 6 to 20 per cent in total costs per year.

CommBank wins

The strategic shift implies profit gains of between 3 and 15 per cent per year would make the Commonwealth Bank of Australia the biggest beneficiary.

“The banking sector likely has the greatest technical potential for AI cost savings, with around 56 per cent of employment highly exposed to automation,” Macquarie said. “We think Commonwealth Bank has the greatest absolute upside from leveraging AI, however Westpac is likely best placed to realise near-term cost savings.”

In 2025, the Australian banking sector took its first big hit from job cuts, including ANZ Bank’s decision to cut 4500 full-time staff and contractors by September this year.

“Within the banking sector, employment is skewed to roles with high technical automation potential, including bank workers, credit officers, and financial dealers,” Macquarie said.

“However, it’s likely that a combination of regulatory requirements, political/social considerations, and legacy issues will limit the potential to realise AI-related cost savings or slow adoption.”

AI hits tech, services sectors

AI’s job wrecking potential is already sweeping through the technology sector, where software coders and programmers are being made redundant in the thousands by some of Australia’s leading growth businesses.

In February, Sydney-based software logistics group WiseTech said it would fire 30 per cent of its staff equal to 2000 employees over the next 18 months.

Elsewhere, Afterpay-owner Block and homegrown giant Atlassian announced 4000 and 1600 job cuts, respectively, in roles they said could be replaced by AI.

Other blue-chip Australian corporates including Telstra, healthcare player CSL, and insurance group MLC Life have made redundancies over the last six months, although not directly linked all of them to AI.

Macquarie’s research shows other professions most vulnerable to job cuts linked to AI automation include; accounting, sales, executive assistants, marketing, human resources and call centre workers.

AI double-edged sword for economy

The investment bank also warned AI’s rapid advance means it will be a double-edged sword for banks or other corporates. This is because soaring unemployment levels will likely equal higher bad debt defaults and lower spending among consumers, already battling cost of living pressures.

Specifically, the banks could face higher mortgage arrears and bad debts if borrowers are made redundant over the next five years. In turn this could lead to regulators demanding major lenders lift credit standards and borrowing limits in another potential hit to the housing market, Macquarie said.

“Indeed, if AI-driven labour market disruption ultimately flows through to credit quality and higher capital intensity, the (banking) sector faces a risk of earnings downgrades and (profit) multiple de-rating, with NAB likely more impacted than peers, given their larger SME (small business) exposure,” Macquarie said.