Australians may soon face a tougher job market. But artificial intelligence is not the main reason why.
A new report from Deloitte Access Economics shows AI is beginning to reshape the workforce. However, it is not triggering widespread job losses.
The findings challenge growing fears that AI will rapidly replace workers across industries.
AI impact
Deloitte examined 82 occupations classified as "AI-disrupted jobs" because many of their tasks do not require human judgement, empathy or interpersonal skills.
Despite concerns, employment in these occupations continues to grow.
Deloitte Access Economics partner David Rumbens said there is little evidence that AI has displaced Australian workers so far.
“(There is) limited evidence of widespread job losses could suggest that AI is currently playing more of an augmentative role in the Australian labour market, with Australians less likely to use AI primarily for automation,” he said.
The report suggests AI is currently helping workers perform tasks more efficiently rather than replacing them altogether.
Job market squeeze
While AI is not cutting jobs on a large scale, finding a new role is expected to become more difficult over the coming year.
Deloitte said the labour market is softening as higher interest rates and economic uncertainty linked to the Middle East conflict weigh on business confidence.
Annual employment growth slowed to 0.9% in the year to April 2026. That is well below the 1.9% average recorded over the previous three years.
At the same time, unemployment has increased by 0.4 percentage points since December 2025.
Mr Rumbens warned that employers are becoming more cautious.
“With economic uncertainty rising, businesses are expected to behave more cautiously, tempering hiring decisions and constraining employment growth over the coming year,” Mr Rumbens said. “With government budgets stretched, public sector jobs growth is also expected to ease further.
“Hiring momentum in non-market sectors like health care, education and public administration has softened, likely reflecting widespread fiscal restraint by Australian federal and state governments.”
Hiring slowdown
The report comes as several major technology companies continue to reduce headcount while investing heavily in AI.
Globally, Microsoft has offered voluntary buyouts to around 7%t of its US workforce, while Meta plans to cut about 10 per cent of staff.
Australia has also seen significant restructuring. Atlassian has cut around 1,600 jobs, while WiseTech Global has reduced its workforce by approximately 2,000 roles.
Growth continues
Deloitte workforce strategy lead partner Sarah Rogers said AI is not causing widespread redundancies. However, it is beginning to influence hiring patterns.
According to Deloitte's forecasts, employment growth across AI-disrupted occupations is expected to slow from an average annual rate of 1.9% over the past five years to 1.2% over the next five years.
“These AI-disrupted occupations are concentrated in white-collar, knowledge-intensive industries such as financial and insurance services, professional, scientific and technical services and information media, but the disrupted tasks within these roles often rely less on judgment, empathy and people skills, ” she said.
The message from Deloitte is clear. AI is changing the nature of work, but Australia's cooling economy is likely to have a bigger impact on hiring prospects in the near term.