Right now, redundancies are a huge chunk of our work. Restructures, role cuts, and businesses that were hiring a year ago are now asking us how to let people go without landing in the Fair Work Commission.
We crunched the numbers. Redundancy work for us is up 20% from this time last year. It’s not the work we love doing but it’s a necessary evil, as many of our clients are making hard decisions on where to make cost savings so they can keep their doors open in the lead-up to their most expensive time of the year.
If you’re not a small business owner, you’ve never had to think about what the Christmas break looks like. It’s a brutal time. Most businesses shut down, which means less income coming in but you still have to pay annual leave, and if you pay fortnightly, December can mean three pay runs. On top of that, leads dry up as businesses wind down and stop spending.
The big end of town is cutting too. And the agency meant to count redundancies has stopped counting until 2027. Why, you may ask? Well, we’re wondering too.
How bad is unemployment right now?
Unemployment hit 4.7% in September. That’s 732,000 Australians out of work, 55,200 more than a year ago. Employment fell by 39,300 in a single month.
In March it was 4.3%. It has crept up almost every month since.
Youth unemployment is 11.1%. Tasmania and Victoria have the highest trend rates in the country, at 5.2% and 5.1%.
The ABS says September’s monthly figure is noisy and points to the trend rate of 4.6%. Either way, the direction is obvious.
Who’s cutting jobs?
In the past two months:
- NAB announced up to 2,500 job cuts, around 6% of its workforce.
- Westpac cut around 140 roles, on top of 102 earlier in the month.
- KPMG cut 27 partners and about 360 staff.
- Deloitte cut about 170 roles.
- EnergyAustralia, EBOS Group and Bupa all announced further cuts.
The federal government is cutting too. Its own May budget plans for around 28,000 fewer public service jobs over four years. (In my view, that one’s a win.)
And not all of this is about the economy. Banks are offshoring and leaning on AI. But when the country’s biggest employers shrink, small businesses feel it next. Fewer customers, tighter credit, and a harder conversation every time you look at your wage bill.
We also know that employing people in Australia is expensive, restrictive and fraught with danger. Unfair dismissal claims, adverse action claims, stress claims. You name it, we’ve got it, and it’s not only small businesses that are struggling with the increasing costs to employ. In my view, this is what’s fuelling the push to offshore and replace people with AI.
I’ve been banging on about this for years. The IR system in this country is broken. It’s being weaponised and pitting employers against their employees. Most business owners are bloody over it. It’s becoming too hard and not worth the stress.
Why can’t anyone tell you how many people are being made redundant?
Because the ABS has stopped counting.
Its last retrenchment figure covers the year to February 2026: 1.8%, or about 257,900 people. That’s before the May budget and before most of this year’s rate rises.
The survey behind that number has been retired. The first figures from its replacement aren’t due until April 2027.
So for over a year, the official redundancy number has been frozen at a point when things looked better. If you’re waiting on official data to tell you how bad it is, you’ll be the last to know. Business owners don’t need a survey. They can see it in their bank balance and are feeling the pinch every single day.
What’s actually squeezing small business?
It’s not one thing. It’s the pile-on.
- Interest rates. Four rate rises this year. More expensive debt, and customers with less to spend.
- Weak conditions. NAB’s business survey went negative in August for the first time since the pandemic.
- Business failures. 14,152 companies entered insolvency for the first time in 2025-26. Construction and hospitality are copping the worst of it.
- Tax changes. From 1 July 2027 the 50% capital gains discount is gone, replaced by indexation and a 30% minimum tax. Small business concessions survive, but a proposed minimum tax on discretionary trusts from July 2028 will hit the many owners who run their business through a trust.
- Workplace reform. More rules, more red tape and more risk every time you hire.
On its own, each one is manageable. Together, they send business owners one message: don’t grow, don’t hire, don’t back yourself.
That’s the real ambition tax. Not one policy, but a stack of them that makes playing it safe the only sensible choice.
If you’re making redundancies, what do you need to get right?
When money is tight, the temptation is to move fast. That’s when mistakes get expensive.
- Make sure it’s genuine. The job itself must no longer be needed. Not the person, the job.
- Consult before you decide. Most awards and agreements require it. Skipping it is the easiest way to lose a genuine redundancy defence.
- Look at redeployment. Including roles in any related entities.
- Get the money right. Businesses with fewer than 15 employees generally don’t owe redundancy pay under the National Employment Standards, but check your award and contracts. Notice still applies.
- Don’t dress up a performance issue as a redundancy. It’s the most common way these claims fall apart.
If you’re looking at cuts, talk to us before you make the call. We’ll cut through the BS and give you a risk-managed path to get it done properly.
FAQs
What is Australia’s unemployment rate right now?
4.7% in September 2026 (seasonally adjusted), up from 4.3% in March. The trend rate is 4.6%. Around 732,000 people are unemployed.
Does the ABS report on redundancies?
Yes, through its annual retrenchment rate. The latest figure is 1.8% for the year to February 2026, about 257,900 people. The survey has since been replaced, and the next figures aren’t due until April 2027.
What is the “ambition tax”?
It’s the name critics gave the government’s capital gains tax changes. From 1 July 2027, the 50% CGT discount is replaced by indexation and a 30% minimum tax. Small business CGT concessions remain.
Do small businesses have to pay redundancy pay?
Employers with fewer than 15 employees generally don’t have to pay redundancy pay under the National Employment Standards. An award, agreement or contract may still require it, and notice still applies.
What makes a redundancy genuine?
The job is no longer needed, you’ve met any consultation obligations under the award or agreement, and redeployment wasn’t reasonable. Miss one and an unfair dismissal claim becomes a real risk.