For Australian job seekers, the market is set to become noticeably tighter by 2026 – but contrary to widespread public fears, artificial intelligence is not the root cause of rising hiring headwinds, a new quarterly analysis from Deloitte Access Economics has confirmed. While the rapidly advancing technology is reshaping day-to-day work across industries, it has not triggered the mass layoffs many experts once predicted, the report concludes.
Deloitte’s research focused on 82 job categories classified as “AI-disrupted”, meaning large portions of their core tasks do not require human judgment, empathetic reasoning, or advanced interpersonal skills. Even in these roles most exposed to AI automation, the analysis found total employment is still growing, defying common narratives about AI-driven job displacement. Deloitte Access Economics partner David Rumbens emphasized that to date, AI has not resulted in broad job loss across Australia’s workforce. “The limited evidence of widespread job cuts suggests AI is currently acting more as an augmenting tool than a replacement for workers in the Australian labour market,” Rumbens explained. “Australian businesses have not prioritized AI for full automation of roles, so far.”
That does not mean job seekers will face an easy market in 2026, however. The report warns that broader economic pressures have pushed the labour market into a cooling trend, making new roles harder to secure than in recent years. Three consecutive interest rate hikes and ongoing economic spillover from the Middle East conflict have created widespread business uncertainty, slowing hiring activity across the private sector. Official data included in the analysis shows annual employment growth slowed to just 0.9% in the 12 months to April 2026, down from an average of 1.9% recorded over the prior three years. The national unemployment rate has also climbed 0.4 percentage points since December 2025, marking a clear shift from the tight, worker-friendly labour market of the early 2020s.
“Rising economic uncertainty has pushed businesses to adopt a far more cautious approach, which has tempered hiring plans and put a brake on employment growth going into the next year,” Rumbens said. Tightening government budgets at both the federal and state level are adding further pressure, with public sector employment growth also projected to continue slowing. Hiring momentum in non-market sectors including healthcare, education and public administration has already softened, a shift Rumbens attributes to widespread fiscal restraint across all levels of Australian government.
The report’s findings come amid a wave of high-profile layoffs at global and domestic tech firms, many of which have publicly cited AI productivity gains as justification for cutting headcount. Globally, Microsoft has offered voluntary buyouts to 7% of its United States-based workforce, while Meta has implemented cuts affecting roughly 10% of its global staff. On the domestic front, major Australian tech firms have also restructured: Atlassian cut 1,600 roles and WiseTech Global eliminated 2,000 positions in recent restructuring rounds.
While mass job displacement has not materialized, Deloitte does acknowledge AI is playing a secondary role in slowing hiring growth. Sarah Rogers, Deloitte’s lead partner for workforce strategy, noted that hiring growth in AI-exposed sectors is projected to slow over the next five years. From an average annual growth rate of 1.9% over the past five years, employment expansion in AI-disrupted roles is forecast to drop to 1.2% annually through 2031. These AI-vulnerable roles are concentrated primarily in white-collar, knowledge-intensive sectors including finance and insurance, professional scientific and technical services, and information media. Rogers added that the tasks most vulnerable to AI disruption in these roles are exactly those that do not rely on human-centric soft skills.