The segment debates whether AI is already destroying jobs or mainly reshaping them. Mercer’s Cynthia Cottrell says Australian firms are planning major restructures and workers’ anxiety is rising, but she argues the evidence so far points more to reorganization, retraining, and uneven productivity gains than to a clean wave of AI-driven layoffs.
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This Bloomberg Australia segment centers on the labor-market impact of AI, especially in Australia. The core tension is between a headline narrative of job destruction and a more cautious view that AI is currently changing how work is done faster than it is eliminating jobs outright. The host opens by citing a Mercer survey suggesting most Australian companies expect AI to take away about 20% of jobs within two years, alongside a talent-trend finding that fewer employees feel they are thriving at work and that uneven access to AI tools is worsening dissatisfaction. Cynthia Cottrell, Mercer's workforce solutions leader for Pacific, pushes back somewhat on the most alarmist interpretation while still acknowledging material disruption. …
Tactically, this is a sentiment-and-headline trade: AI layoff stories can keep pressuring labor-sensitive names and early-career hiring narratives. The immediate risk is that restructuring chatter outpaces any visible productivity proof.
Over the next few months, the more likely path is selective workforce redesign, not a clean labor-market shock. The key confirmation will be whether AI adoption shows up in operating efficiency without a broad step-up in unemployment.
Structurally, the transcript supports a regime where AI becomes a standard workflow layer and a screening skill in hiring. The durable issue is not just job loss, but who captures the productivity gains and how unevenly they are distributed.
Most Australian companies expect AI to take away about 20% of jobs within two years.
Opening claim attributed to a Mercer survey cited by the host.
AI is already boosting productivity by up to 30% and jobs are being redesigned rather than simply replaced.
Presented as the contrasting view from Deloitte/Apex senior Rob Hillard.
Most restructures are not purely the result of AI; business-model change and market volatility are also driving them.
Cottrell directly qualifies the layoff narrative.
When we talk about labor force productivity, does that really mean the loss of jobs as opposed to just redesign or retraining?
Cynthia says it's a combination of things — restructurings are happening (98% of surveyed organizations plan restructures this year), though not all due to AI. Employee thriving has dropped to its lowest in 10 years (44%), and fear of job loss jumped from 28% in 2024 to 40% in 2026. 99% of CEOs believe there will be headcount cuts, but only 32% believe they can integrate humans and machines to drive productivity, suggesting the productivity benefits are ahead of actual capability.
How does Australia compare to other regions when it comes to segments and types of roles that might be affected by AI?
Australia isn't particularly more exposed in graduate or early-career roles compared to other parts of the world. However, Australia may be more advanced in recognizing productivity gains and driving AI tool usage into education, better equipping graduates with those tools as they come out of the pipeline.
What is your message to young people about what they should be specializing in and doing, given the AI disruption?
Cynthia acknowledges the tough spot graduates are in — many were discouraged from using AI tools during their education but now face hiring decisions based on AI literacy. Her advice is to absolutely learn the tools while continuing to hone creativity, judgment, and critical thinking.
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