The federal government has criticised Qantas’ decision to outsource 850 jobs, mostly to India, as part of a process to automate them through AI as “incredibly disappointing”.
Describing the outsourcing move as “part of the business model for Qantas for some time,” Transport Minister Catherine King said: “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 license.”
Qantas said on Tuesday it will 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 airline said that outsourcing the roles though Accenture will result in certain in-house processes being sent to India, where they would be analysed and simplified. Automation will be added, and then the process will be reincorporated into Qantas’ Australian operations at a later date.
In making the announcement, which drove its share price higher, CEO 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.”
The announcement came as both immigration and the impact of AI have skyrocketed to the top of the national political conversation.
Speaking to the ABC, King questioned the plan to outsource the demand for the AI related work to another country, although acknowledged Qantas’ need to “get ahead of AI” and to modernise its platforms. “I think the union is right to be disappointed that it’s resulting in 850 job losses.”
“I think investing in the workforce that has basically built it should be a priority for Qantas.”
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.
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, for example, in helping it secure jet fuel from Asian ports in the aftermath of the Iran-US conflict this year. In other ways, the Albanese government has protected Qantas from full exposure to deep-pocketed Qatar Airways’ ambitions to fly to Australia, in part for Australia’s national aviation sovereignty.
“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,” King said.
“It shouldn’t just be an exercise in taking costs out of the business. It’s got to be an exercise in growing the business and growing Australian jobs for the future. And I think that’s what both the government, the union and the Australian people would expect of it,” she said.
The Australian Services Union said that when the prospect of back-office modernisation project became known, Qantas had “told us directly there was no plan to offshore any jobs”.
Qantas vigorously 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, with retraining, reskilling and opportunities elsewhere across the group, including through the creation of new roles here in Australia.”
The company said it continues to engage with the union.
Former Qantas ground crew worker Ryan Perrett , one of 1800 people who were illegally sacked by the company as it moved to outsource the roles, said that the airline “obviously has learnt nothing” from the court case.
“It makes their ‘apology’ to us feel empty and disingenuous. These types of behaviours make it blatantly obvious that the penalties from cases like ours aren’t sufficient. They simply see it as an investment towards cost of doing business.”
Qantas has had difficulty with offshoring in the past. In July last year, nearly 6 million customer records - including sensitive Chairman’s Lounge membership data - was accessed through a Philippine-based call centre, resulting in renewed questions about its cybersecurity.
Qantas recently opened a product innovation centre in Adelaide, which is expected to grow to more than 400 roles.
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