AI sackings reach New Zealand, which will use it to eject 14 percent of government staff

Public Sector

Minister demands AI becomes ‘basic expectation for all public entities’

The wave of layoffs attributable to the adoption of AI has washed up on the shores of New Zealand, which has announced an overhaul of its public service that will see the technology become a “basic expectation” for government agencies and help to make it possible to sack 9,000 staff – about 14 percent of current headcount.

Finance Minister Nicola Willis announced the job cuts yesterday, in a speech that saw her bemoan the fact that New Zealand’s government comprises 39 departments and ministries, and compared that to the 16 in Australia and 24 in the UK.

She characterized the nation’s public service as “scared of AI, slow to move to the cloud” and said it operates a “complex and fragmented set of overlapping IT solutions.”

“Our government is as frustrated as you are by the fragmentation and silos, the complexity, the status-quo thinking and the dangerously slow take up of digital and AI technologies,” she added.

Aotearoa’s answer is to task its Chief Digital Officer “to embed AI deployment as a basic expectation for all public entities.”

Minister Willis mentioned a “recent trial of an AI scribe tool in hospital emergency rooms which has reduced the amount of time clinicians have to spend on file notes and increased the time they spend with patients” as an example of the sort of thing she hopes to replicate.

She said the planned overhaul will therefore “reduce the number of government departments, increase the use of AI and other digital tools, and deliver significant savings.”

The government plans to cap departmental budgets and says that combined with redundancies it will save NZ$2.4 billion ($1.4 billion) over four years – less than one percent of all core government spending.

Plenty of tech companies have made substantial redundancies that they justify as necessary to create an appropriate workforce for the age of AI, an explanation we’ve seen deployed to explain deep cuts at Cisco, Cloudflare, Atlassian, Meta, and Arctic Wolf.

Few governments have done likewise, but one early high-profile effort – the Elon-Musk-led “Department of Government Efficiency” – hoped to use AI to improve government operations but left behind little evidence it had succeeded.

New Zealand is blessed with many resources and extraordinary natural beauty, but has a modest tax base – yet residents expect a high level of government services. Minister Willis’s plan is therefore a very big bet on AI. ®