NAB CEO Andrew Irvine gave hint weeks before cutting 2500 jobs

Two months ago NAB chief executive Andrew Irvine lamented Australia was experiencing its worst ever bout of productivity growth and noted typing pools were now a thing of the distant past.

The head of Australia’s biggest business lender, whose initials are also AI, noted artificial intelligence was the key to solving “our productivity gap” that would revolutionise humanity - after earlier warning about a recession.

“Be under no illusion, AI is the fourth industrial revolution, and it will be as consequential to how we live and work as the steam engine, electricity and the computer was to humanity,” Mr Irvine told the NAB Business Summit in Melbourne on August 24.

At the same conference, he noted that NAB decades ago “employed thousands of bank tellers, thousands of administrative clerks and we had large typing pools”.

“The point is, our workforce is always changing. What is important is that we help Australians run to AI not from it, learn how to use it to be better at their work and teach them the skills they need to be future fit,” he said.

Just eight weeks later, he told the Australian Securities Exchange in an 8.30am announcement that National Australia Bank would be retrenching 2500 staff - or 6 per cent of its global workforce by mid- 2027 - with 1500 of those roles to be gone by the end of 2026.

NAB’s job cuts, based on a March staff count of 42,610 people in 11 countries, are designed to reduce the duplication of back-office roles and improve productivity, at Australia’s third biggest bank.

“Our ambition and strategy remain unchanged. We will improve productivity, risk outcomes and execution to be a simpler and more efficient bank,” he said.

“These changes are expected to improve outcomes for customers by reducing duplication and speeding up decision making.

“We are particularly focused on reducing the size of corporate functions. There will be no material impact to customer-facing banking roles.”

NAB would also be undergoing a management restructure to “prioritise growth and technology initiatives for customers”.

“We have also deliberately made deeper changes to senior management positions which will broaden leadership responsibilities across the bank,” he said.

“This will simplify work between teams and improve cross-functional processes with clearer roles, priorities and accountabilities for our colleagues.”

Kyle Rodda, a senior financial market analyst with Capital.com, said NAB’s job cuts were a sign that artificial intelligence would increasingly replace humans in back-office roles at Australia’s major banks.

“All these middle office functions that generally have a high head count but aren’t a profit centre for the business, those roles are becoming far more productive because the operational side of things, the process management side of things, can be scaled up quite significantly with AI,” he told The Nightly.

“It basically takes a whole bunch of manual work that would be done by people punching numbers into a spreadsheet.

“It will be happening across these large, monolithic institutions which are quite cumbersome and bureaucratic - the jobs that are labour intensive and that AI happens to do very well, you’re still way better than a human being that aren’t always put to the most productive purposes.”

Higher interest rates are also expected to see the banks cut back on staff now that AI is proving to be more practical.

“It’s going to tamper demand for credit, it will reduce the supply of it as well, and there will be those second order effects as well on consumption and investment, it’s obviously not great for banks too,” Mr Rodda said.

Finance Sector Union national assistant secretary Nicole McPherson said NAB’s job cuts, announced so close to Christmas, would fail to make the bank more efficient.

“To take a wrecking ball to six per cent of one of Australia’s largest workforces this close to Christmas is disgraceful and shows that NAB’s leadership is completely detached from the lived experience of their workers,” she said.

“Cutting six per cent of a workforce will not ‘simplify’ NAB’s operating model or ‘better align its workforce to prioritise growth’.

“It will wreak chaos and entrench a culture of anxiety at a bank that seems hell bent on self-destruction.

“NAB’s public statement today is full of nothing put corporate spin and confirms the bank is in denial about the significant impact these cuts will have on a workforce already overwhelmed by unmanageable workloads.”

Swinburne University of Technology governance expert Helen Bird has demanded NAB reveal the role AI would play in replacing staff.

“The size of the staff reduction suggests something far more ominous,” she said.

“What isn’t being talked about, but is absolutely critical, is the use of technology, including AI, to replace staff involved in administrative, monitoring and oversight functions.

“NAB needs to be upfront about whether it is using AI to replace these roles. It also needs to explain the governance protocols surrounding its use, particularly where human oversight sits in these changes.

“Banks provide an essential service to the community, so accountability, including around the use of technology, is not optional.

“Institutions like NAB need to be transparent about these decisions, not just in financial terms, but about the full extent of technology-driven change.”

The news was announced five days after the Australian Bureau of Statistics announced that unemployment in September rose to a five-year high of 4.7 per cent, with the Reserve Bank’s four interest rate rises so far this year slowing the labour market.

“We know this will be a difficult period for our colleagues impacted by these changes as well as the people around them,” Mr Irvine said.

“We will treat every person with dignity and respect.”

The Commonwealth Bank, Australia’s biggest home lender, last month announced 232 job cuts, taking the total this year to 1000. NAB’s cuts are more than double that.

In May the head of the bank, which releases a monthly business confidence survey, warned a recession was a possibility in light of the Iran war.

“While I don’t think it’s probable, it certainly is possible,” Mr Irvine told reporters at a half-year results presentation.

“Our central forecast is we don’t see a recession, but I would say that we all need to have lots of humility in how we think about forecasting right now, because the volatility and uncertainty is very, very high and I would say the margin of error in forecasting right now is meaningful,” he said.

That May 4 declaration was a day before the Reserve Bank would raise interest rates for the third time this year, ahead of another increase in September that has taken the cash rate to a 15-year high of 4.6 per cent.

“The duration and intensity of this liquid fuels crisis is going to be significant and we’ll also need to see how our customers respond to the possibility of an interest rate rise at the same time,” Mr Irvine said.

The job cuts have hardly thrilled investors with NAB shares plunging 1.8 per cent to $39.20 as the broader S&P/ASX200 shed 0.3 per cent - wiping $2 billion from its market capitalisation.

NAB’s full-year earnings for the year to September 30, 2026, are due to be announced on November 5, when the thinking behind the job cuts will be properly explained.