This Bank Fired Workers And Replaced Them With AI. It Now Says That Was A Huge Mistake

This article, written by Chris Morris, was originally published on Inc.com.

Last month, the story at the Commonwealth Bank of Australia (CBA) was a familiar one: Some 45 customer service workers were put out of their jobs as the financial institution pivoted to an artificial intelligence solution.

It wasn’t long before the bank was touting the success of its AI voicebot, saying it had reduced call volumes by 2,000 per week. But what happened next was a rarity: The bank asked the workers it had laid off to come back, saying the AI wasn’t able to do the job.

The CBA has issued an apology to the affected employees along with the offer to come back, but said it would also honor promised payments to those who wished to leave.

The boasts about the AI’s performance, it turned out, were untrue, says the union representing the displaced workers. The union took the matter to Australia’s Fair Work Commission, which is akin to the Equal Employment Opportunity Commission in the U.S., an agency that enforces anti-discrimination laws in the workplace.

“Members told us this [boast about reducing call volumes] was an outright lie and did not reflect the reality of what was happening in Direct Banking,” the union said in a statement. “Call volumes were in fact increasing and CBA was scrambling to manage the situation by offering staff overtime and directing team leaders to answer calls.”

CBA, in a statement to Bloomberg, said its decision that the customer service workers were no longer needed “did not adequately consider all relevant business considerations and this error meant the roles were not redundant.”

The CBA is far from the first company to lean hard into replacing workers with AI, only to find that humans are still essential. Two years ago, Klarna CEO Sebastian Siemiatkowski announced he wanted his company to be the “favorite guinea pig” of OpenAI, instituting a hiring freeze and replacing as many workers as possible with AI systems.

While the fintech company is still investing in AI, it has rethought its approach to human workers. In May, Klarna announced plans to go on a hiring spree, ensuring customers will always have the option to speak to a live representative.

Meanwhile, earlier this year Duolingo announced an AI-first shift, saying it would stop using contractors to do work AI can handle and only increase headcount when teams have maximized all possible automation. That was met with a wave of negative feedback on social media. Duolingo said much of that feedback came from people who didn’t understand what AI-first means. It was still doing damage control earlier this month, with the CEO vowing the technology would not replace human workers.

More recently, MIT issued a report claiming that 95 percent of AI pilot programs at companies have been failures so far, with no measurable impact on profits and losses.

Despite all this, AI is still expected to have a dramatic effect on the workforce. Aravind Srinivas, the CEO of Perplexity, warned in July that the technology could replace recruiters and assistants in as little as six months. And in May, Anthropic CEO Dario Amodei sounded an alarm, saying AI could wipe out roughly 50 percent of all entry-level white collar jobs within five years, which he said could cause unemployment to spike to between 10 percent and 20 percent.

That warning, he said, was aimed at both lawmakers and his peers in the AI world.

“Most of them are unaware that this is about to happen,” Amodei said. “It sounds crazy, and people just don’t believe it. … We, as the producers of this technology, have a duty and an obligation to be honest about what is coming.”