Some of Australia's biggest employers are cutting thousands of jobs, and economists are asking whether the "resilient" job market is starting to crack — and is another sign of an impending recession.
From banking and mining to digital services — the job cuts have been mixed across various sectors.
Last week, the country's digital design giant, Canva, announced it will cut or relocate more than 1,200 jobs — 22 per cent of its workforce — in what was described as the company's first restructuring in 13 years.
Just a day later, gas giant Woodside Energy announced it would cut at least 500 jobs globally as part of a cost-cutting process, with 80 per cent of its workforce based in Australia.
On the same day, the country's iconic retailer David Jones announced it had entered voluntary administration.
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The job-cutting trend has also hit the banking sector, with National Australia Bank (NAB) announcing plans to cut 2,500 jobs by the end of the financial year in October.
"They're significant. In some cases, some of these businesses are shedding," Robert Breunig, an Australian National University pubic policy economist, told SBS News.
"It's hundreds or even thousands of jobs, and it's a large fraction of their workforce.
"But in terms of the number of overall jobs in the economy, it's still just a relatively small piece of the picture."
These under-pressure employers face different disruptions.
Canva co-founder and CEO Melanie Perkins said in a statement on the job cuts that "new technology is transforming what people can create" and "small changes won't be enough" — without directly naming artificial intelligence (AI).
David Jones's announcement came after years of mounting pressure on traditional department stores from changing shopping habits, online competition and expensive property decisions.
And NAB blamed challenging economic conditions, technological change, competition and a need to simplify its operating model.
Robert Brooks, a professor in the department of econometrics at Monash University, says each company announcement offers "different lessons" to be learnt.
"Canva is obviously a newer company at a much earlier stage, and it's working through what its appropriate business model is in a digital transformation setting," he told SBS News.
"David Jones is a mature company in a mature industry that's been significantly impacted by technological change and changing people's retail purchase patterns.
"The banking sector ones are somewhere in between. [They] are obviously a very mature and sophisticated economic sector. They're clearly in a business model that is being disrupted, but a lot of their business has a tremendous go-forward version."
The job cuts have happened while Australia's unemployment rate climbed to 4.7 per cent in September — its highest level since October 2021, according to the Australian Bureau of Statistics (ABS).
That official rise coupled with the company cuts have raised questions about the strength of the job market.
"The [job] market has been really resilient up to a point. It's been able to absorb a lot of significant policy change, and it's been able to absorb a lot of geopolitical shocks," Brooks said.
"What we've seen in the more recent data is this picture where the market has become slightly less resilient.
He said although people should watch the current job market "incredibly carefully", there is not enough information to show that it has started to crack.
The ABS figure showed almost 40,000 people lost their jobs in September, while 732,000 people were unemployed in total nationwide.
Breunig said while Australia's job market is not doing as well as a year ago, the Australian economy remains pretty robust.
"We often talk about job losses because those are the things that get the media attention, but there are also thousands of jobs that are created every day. And Australia does have a very dynamic small business sector."
He warned that the rise in the unemployment rate might affect the country's economy as a whole.
"It does put the government in a difficult position because they're gonna have to pay more in income support payments to people. They're also gonna get less tax revenue from fewer workers," he said.
More job losses are expected in the coming months following the Reserve Bank's rate November hike from 4.6 per cent to 4.85 per cent — the highest since 2008.
Economists and social services groups are bracing for the unemployment rate to grow in the following months, with higher interest rates generally leading to higher unemployment rates.
"The effect is that it makes people feel poorer because they're spending more money on their mortgage. So they have less money to spend in the economy ... and that ripples through to lower employment," Breunig said.
"And then, [in] the long term, AI is very likely to displace jobs. It will create other jobs, and other jobs will come along. But again, the kind of short- to medium-term effect of AI is also likely to push the unemployment rate up."
Persistently higher unemployment can affect the entire country’s economy, potentially leading to a recession — something the RBA has said it wants to avoid.
One way of detecting the onset of a recession by measuring unemployment is the 'Sahm Rule': it considers a recession is underway when the three-month average unemployment rate is at least 0.5 per cent higher than its lowest level in the past year. The RBA though adjusts this to 0.75 per cent for Australia.
Here, the jobless rate averaged 4.63 per cent from July to September, up from 4.17 per cent between December and February — a 0.46-point increase, which falls short of the Sahm Rule threshold.
Last week, while announcing the fifth rate rise of the year, RBA governor Michele Bullock said that it will "make people feel like it's a recession because they feel poorer".
But she said the bank "is not looking to tip the economy into a recession if we can avoid it".
One factor that could influence a rate cut is rising unemployment.
The potential impact on employment was also among the factors the RBA's board considered at its last meeting, when six board members voted to raise rates, while three voted to leave them unchanged.
Brooks said part of the reason for the split vote was questions about whether the rate increase will have "a large spike in unemployment that the labour market can't quite deal with".
"I think from part of the commentary and the discussion that's come out from the recent decision, they are clearly going to need to take a look.
"More data that tells us that unemployment is continuing to rise would suggest that we wouldn't wanna push too hard further on contractionary monetary policy."
