{"id":818434,"date":"2026-07-23T09:28:23","date_gmt":"2026-07-23T09:28:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/818434\/"},"modified":"2026-07-23T09:28:23","modified_gmt":"2026-07-23T09:28:23","slug":"job-cuts-looming-for-35-major-australian-companies-as-inflation-and-ai-constrict-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/818434\/","title":{"rendered":"Job cuts looming for 35 major Australian companies as inflation and AI constrict economy"},"content":{"rendered":"

Workers at some of the biggest companies in Australia have been warned of potential job cuts<\/a> on the horizon .<\/p>\n

A report from investment bank Goldman Sachs analysts Matthew Ross and Tony Wu highlights 35 ASX<\/a>-listed companies which could be in danger of reducing their workforces due to soaring wage costs and a slowing economy<\/a>.<\/p>\n

The pair picked the companies where labour costs had outgrown sales by more than 10 per cent since 2022. <\/p>\n

Know the news with the 7NEWS app: Download today Arrow<\/a><\/p>\n

They include NAB, the largest company by market cap on the list, Coles, JB Hi-Fi and the ASX, with the banking, medical, mining and retail industries hit particularly hard.<\/p>\n

They said NAB\u2019s labour costs grew to 30 per cent of net sales, while Coles and JB Hi-Fi rose to 14 per cent and 10 per cent, respectively. <\/p>\n

The highest costs on the lists came from defence and space-tech company Electro Optic Systems, which spends about 55 per cent of sales on labour.<\/p>\n

Ross and Wu argued jobs at the companies could be cut sooner rather than later, as the blowout of labour costs will have to be explained to investors during the upcoming \u201ccost-out\u201d reporting season.<\/p>\n

\"AA report from investment bank Goldman Sachs has warned of 35 ASX-listed companies which could soon swing the axe. Credit: Richard Drew\/AP<\/p>\n

\u201cThe combination of a slowing domestic economy and a pick-up in price pressures is likely to sharpen the focus on costs this earnings season,\u201d the report reads.<\/p>\n

That focus will most likely turn to the workforce with wage growth expected to remain elevated for much of the new financial year while sales drop due to persistent inflation.<\/p>\n

The report says the mining industry will also have to deal with increased costs to diesel, materials and equipment due to war in the Middle East.<\/p>\n

But Ross and Wu also claim that artificial intelligence remains \u201ctop of mind\u201d for companies, not just for \u201cpotential efficiency gains\u201d but also scrutinising the cost of using AI.<\/p>\n

The report found that most big firms have rapidly shifted their IT budget to allocate between 1 per cent to 5 per cent toward AI costs such as the consumption of \u201ctokens\u201d sold by large AI companies.<\/p>\n

\"InvestmentInvestment bank Goldman Sachs has warned of 35 companies which could soon cut jobs due to soaring labour costs. Credit: FactSet, Goldman Sachs Global Investment Research\"TheThe warning comes as persistent inflation also causes a reduction in sales, with some companies on a collision course with job cuts. Credit: Lukas Coch\/AAP<\/p>\n

However, the prevalence of AI has also led to concerns of companies using it as an excuse to cut jobs when \u201cother factors are at play \u2014 also known as AI-washing\u201d.<\/p>\n

Ross and We said their US counterparts found \u201cthat both AI-related layoffs and post-pandemic headcount normalisation have driven the tech-sector hiring slowdown\u201d.<\/p>\n

While their report highlights the 35 most at-risk companies, the pair expect \u201cmore companies to focus on improving labour productivity\u201d.<\/p>\n

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