Qantas Cuts 850 Jobs and Calls It AI. Unions Call It 'AI Washing'

Qantas will cut 850 jobs and outsource corporate functions offshore under an AI-driven overhaul with Accenture, announced Oct. 10, and unions accuse Australia's blue-chip companies of "AI washing" — blaming technology for cuts driven by cost savings.

The Australian Council of Trade Unions, the Australian Services Union and a Greens senator have all challenged the framing. Tech firms WiseTech and Atlassian cut jobs this year citing AI. Telstra cut roles from an AI joint venture with Accenture, offshoring some work to India. Other Australian firms slashed domestic headcount while expanding in India, the Philippines and Vietnam without mentioning AI.

The dispute lands on a government already under pressure. Unemployment has reached a five-year high of 4.7%. The central bank has raised rates five times this year to an 18-year peak. Recent polls show the Labor government's approval ratings falling amid cost-of-living pressures.

What does 'AI washing' actually mean?

The term describes companies attributing layoffs to AI tools when the primary driver may be broader cost-cutting, such as shifting jobs offshore to lower-paid employees. That is precisely what unions allege.

"Unions are concerned about the risk of companies using AI simply as a cover to cut Australian jobs with no accountability," said ACTU Secretary Melissa Donnelly. "From Qantas to the big banks, workers deserve transparency and genuine consultation over decisions that impact their jobs and lives."

The Australian Services Union, which represents the affected Qantas workers, went further. It accused the airline of "using AI to launder their cuts to Australian jobs."

"We expect to see more of this cost cutting and race to the bottom if corporate Australia continues to copy this failed tactic," said Assistant National Secretary Scott Cowen.

Senator Barbara Pocock of the Australian Greens said on Wednesday she was concerned about big companies using the technology as an excuse. "AI is transforming our workplaces and economy but that's no excuse to let it run rampant," Pocock said in a statement.

Why the Qantas deal raises the sharpest questions

Uri Gal, a professor at the University of Sydney Business School, provides the analytical core of the case. He said a growing number of companies were blaming job cuts on AI, but "we should therefore be cautious about accepting AI as the primary explanation."

"There are real incentives to engage in AI washing," he said. "A company that announces job cuts to reduce costs may face criticism, whereas one that presents the same decision as part of an AI transformation can appear innovative and forward-looking."

Gal read the Qantas decision as conventional outsourcing dressed in AI language. His logic question cuts to the mechanism:

"The company has announced that some corporate functions will be transferred to Accenture, primarily in India, and explicitly states that these functions will subsequently be transformed through AI and automation," Gal said. "This raises an obvious question: if AI is making these jobs redundant, why does the work first need to be transferred to another group of employees?"

In other words, the work moves to humans abroad before any AI touches it. That sequence suggests restructuring first, AI justification second.

What have the companies and the government said?

A Qantas spokesperson said the airline would continue to consult with unions and was focused on "redeployment opportunities" and support for impacted staff. Qantas did not respond to the 'AI washing' concerns. Atlassian, WiseTech and Telstra did not immediately respond to requests for comment.

Prime Minister Anthony Albanese, speaking after unveiling a response to a recent breach of a government website by an OpenAI agent, said AI "represents an enormous opportunity and a major economic issue." He did not address the Qantas cuts directly.

A government spokesperson said Australian workers should see the benefits of new technologies and that employers should invest in upskilling them to adopt AI.

What does the data say about AI and jobs?

The Reserve Bank of Australia said this week AI had not yet led to widespread job losses. But it noted "tentative signs of adjustment": job ads weakening in AI-exposed occupations and employment growing more strongly in less affected roles.

That finding matters for the debate. It undercuts claims that AI alone is forcing mass redundancies today, while confirming that the labor market is shifting where AI exposure is highest.

The political math is simple. Each new round of layoffs tied to AI invites the same question Gal posed about Qantas, and with unemployment at 4.7% and rates at an 18-year high, the government's response to that question will shape whether 'AI washing' becomes a durable election issue.