AI and the Workforce: Impact and Policy (NZ, 2025)

AI technologies are reshaping the nature, trajectory and expectations of and within industries, with significant implications for jobs and skills. The New Zealand Government views AI as a major productivity enabler: for example, it notes AI could add an estimated NZD$76 billion to GDP by 2038. At the same time, firms are integrating AI in various ways.  In healthcare, the Royal Melbourne Hospital (RMH) automated its learning management system, freeing over 1,000 staff hours per month from administrative tasks,¹ and RMH researchers are prototyping AI tools to assist radiologists.²  In banking, the Commonwealth Bank of Australia (CBA) recently cut 45 call-centre jobs after deploying an AI chatbot to handle customer inquiries,⁴ while pledging to retrain affected staff.⁵ Toyota’s Japanese operations illustrate a different approach: the company is investing in human-centric AI, launching an AI-focused training academy, and deploying self-driving robots in its factories to reduce manual labour (e.g. using autonomous vehicles to move cars across plant parking lots).³ Meanwhile, New Zealand’s largest retailer, The Warehouse Group, has embraced AI for business intelligence and supply-chain decisions – deploying machine-learning for pricing and stocking recommendations,⁹ and using generative-AI “assistant” bots to help staff plan sales targets.¹²

Case study applications of AI across various industries

  • Royal Melbourne Hospital (RMH): RMH used technology to reduce staff workload, saving about 1,000 hours of nursing education administration per month.¹ Its research teams are also exploring AI applications in clinical workflows. For instance, a recent project investigated redesigned interfaces for AI-driven radiology reports, highlighting the importance of AI as a supportive tool for maintaining accountability rather than replacing clinicians.² These examples show healthcare AI can augment staff efficiency and diagnostic accuracy.
  • Commonwealth Bank of Australia (CBA): Earlier this year, CBA introduced an AI chatbot to handle customer calls and subsequently cut 45 positions in call-centre teams.⁴ The bank explained that AI would handle simple customer queries, allowing human staff to focus on complex cases.⁴ The Finance Sector Union noted these cuts and urged CBA to retrain impacted workers to work alongside AI, which the bank has agreed to do.⁵ Thus the CBA case demonstrates that earlier fears of AI-driven job displacement in service roles are starting to surface, with increasing evidence that roles requiring the performance of simple, repetitive tasks are being replaced by positions that require more customer-facing or complex activities; therefore increasing organisations’ efforts to transition workers into higher-value tasks.
  • Toyota Japan: Toyota has blended automation with its traditional lean manufacturing. For example, it deployed self-propelled robotic shuttles at the Motomachi plant to transport new vehicles across the lot, effectively cutting down the time that workers would previously need to spend walking, totalling approximately 5 miles per day. Toyota reported this increased productivity by 20%. However, Toyota leadership also cautions impacts of AI on the workforce: company chairman Akio Toyoda warned that a shift to EV-only production (which uses fewer moving-part engines) could trigger job losses among engine specialists.⁸ In recognition of the different skills that employers of the future would expect from their workers, Toyota is heavily investing in workforce skills. In 2025 Toyota and partner firms launched a “Software Academy” to train employees in AI and software engineering, emphasising people-first innovation in line with Toyota’s values³. These initiatives suggest Toyota seeks to augment and retrain its workforce as it adopts AI, rather than simply cut jobs.
  • The Warehouse Group (NZ): The Warehouse Group has applied AI to its retail operations in multiple ways. It partnered with software vendors to use AI-driven analytics and machine learning for merchandising decisions: for example, deploying an AI platform (Insite AI) to forecast demand and optimise inventory allocation.⁹ The company also modernised its IT infrastructure by migrating to cloud services and tools with built-in AI: a 2024 Microsoft partnership noted The Warehouse Group is piloting Azure ML Ops for dynamic pricing and generative-AI tools to automate product database updates.¹⁰ Internal staff use AI-powered BI dashboards and chatbot assistants to gain actionable insights from sales data, enabling quicker decision-making. In each case, The Warehouse’s approach has been to equip existing employees with AI-based tools (sometimes with vendor support) rather than to lay off large numbers of workers.

New Zealand’s AI Governance and Policy

New Zealand has developed a suite of guidelines and laws to govern AI in both public and private sectors.  The 2024 Public Service AI Framework sets out principles for government agencies adopting AI: it emphasises lawfulness, fairness, privacy, and safety, and explicitly adopts a human-centric approach. The framework’s vision is “Adopt AI responsibly to modernise public services and deliver better outcomes for all New Zealanders,” ensuring that “people” - public servants and citizens - remain at the forefront of AI design and adoption. The framework defines five key principles (e.g. “AI should respect human dignity and rights”) and urges agencies to build internal capability, governance structures, and risk-management processes for AI implementation. Although voluntary at this stage, this framework aligns with OECD AI Principles and signals that New Zealand expects public organisations to embed safeguards (such as adherence to privacy and anti-discrimination laws) whenever they use AI.
In the private sector, the Ministry of Business, Innovation & Employment (MBIE) released Responsible AI Guidance” (2025) for businesses.⁶.  This practical guide suggests risk-management best practices: e.g. maintaining a risk register, communicating AI usage policies, conducting impact assessments, documenting AI systems (via “model cards”), and having contingency plans for AI failure.  MBIE underscores that adherence to existing regulations – including NZ’s Privacy Act, Fair Trading Act, and Human Rights Act – is crucial when deploying AI.  In parallel, the NZ Privacy Commissioner published guidance linking AI to the Privacy Act 2020: it clarifies how the Act’s 13 Information Privacy Principles apply to AI use, and gives practical examples of how, for instance, data minimisation and algorithmic transparency are required to comply.  The Privacy Act itself mandates that any AI system handling personal data must meet standards of consent, security, and purpose limitation. Collectively, these policies mean NZ organisations must integrate ethical and legal checks (privacy impact assessments, fairness audits, etc.) into AI projects by design.

Recommendations

Drawing on these case studies and best practices, we recommend that organisations adopting AI should:
  • Invest in people and skills. Prioritise up-skilling and re-skilling existing staff for AI-augmented roles (as exemplified by Toyota’s academy).³ This might involve training your teams and workforces in data literacy, uses of different AI tools, and digital skills. For workers displaced by automation (e.g. call-centre staff), offer clear redeployment paths and career transition support⁴. Industry surveys show firms that empower workers with AI skills improve productivity and morale, while talent gravitates to “AI-ready” employers.
  • Embed human-centric design. Align AI projects with user needs and public values (as the Public Service AI Framework dictates ). In practice, this means involving employees in AI design, ensuring human oversight of AI decisions, and designing systems that augment rather than replace human judgment. For example, Toyota’s approach uses robots to handle strenuous tasks but keeps human workers involved in quality control and improvement.⁷
  • Adopt robust governance and ethics. Establish clear accountability for AI outcomes. Maintain documentation (model cards, audit logs) and AI usage policies, as recommended in MBIE guidance . Conduct bias and privacy impact assessments on AI systems, following privacy commissioner guidance . Ensure any AI procurement or partnerships (e.g. with cloud or software vendors) include contractual protections around data security and misuse.
  • Leverage frameworks and standards. Use the NZ government’s AI frameworks and international norms as checklists. For public agencies, alignment with the Public Service AI Framework ensures compliance with public-sector values . Private firms can refer to MBIE’s checklist for corporate AI risk management and OECD AI Principles (e.g. fairness, transparency). Staying informed of regulatory changes (for instance, auditing upcoming AI-specific rules or new Privacy Act guidelines) will help avoid legal pitfalls.
  • Monitor and adapt. Finally, continually measure AI’s workforce impact (e.g. track time saved, tasks automated, and roles created) and adjust strategies accordingly. Engage unions and staff early, as CBA’s experience shows that transparent planning can mitigate backlash⁵. By taking a proactive, ethical, and people-focused approach, organizations can harness AI’s productivity gains without undermining workforce wellbeing.
References
  1. Royal Melbourne Hospital saves 1,000 hours on learning admin a month with increased automation, Totara (2025). URL: https://totara.com/resource/royal-melbourne-hospital-saves-1000-hours-on-learning-admin-a-month-with-increased-automation/ .
  1. Presta, K., et al., “Artificial intelligence changes way radiologists read scans,” Royal Melbourne Hospital News (30 May 2023). URL: https://www.thermh.org.au/news/latest-news/2023-news/artificial-intelligence-changes-way-radiologists-read-scans/ .
  1. Toyota Motor Corporation, “Five Toyota Group Companies to Accelerate Skill Development and Innovation in AI and Software” (News Release, 22 May 2025). URL: https://global.toyota/en/newsroom/corporate/42805724.html .
  1. ABC News Australia, “Commonwealth Bank replaces dozens of call centre jobs with AI chatbot” (29 July 2025). URL: https://www.abc.net.au/news/2025-07-29/commonwealth-bank-says-ai-behind-dozens-of-job-cuts/105586312 .
  1. Reuters, Shayangi Lahiri, “Australian lender CBA to cut 45 jobs in AI shift, draws union backlash” (29 July 2025). URL: https://www.reuters.com/business/world-at-work/australian-lender-cba-cut-45-jobs-ai-shift-draws-union-backlash-2025-07-29/ .
  1. Government of New Zealand, MBIE Media Release, “Artificial Intelligence strategy and business guidance now available” (8 July 2025). URL: https://www.mbie.govt.nz/about/news/artificial-intelligence-strategy-and-business-guidance-now-available .
  1. Reuters, David Dolan, “In EV battle, Toyota bets on new technology and old-school thinking” (19 Sept 2023). URL: https://www.reuters.com/business/autos-transportation/ev-battle-toyota-bets-new-technology-old-school-thinking-2023-09-18/ .
  1. Reuters, Daniel Leussink, “Shift to EV-only future would spell job losses, Toyota chairman warns” (10 Oct 2024). URL: https://www.reuters.com/business/autos-transportation/shift-ev-only-future-would-spell-job-losses-toyota-chairman-warns-2024-10-10/.
  1. CIO New Zealand, “The Warehouse Group deploys Insite AI technology” (21 Nov 2018). URL: https://www.cio.com/article/201463/the-warehouse-group-deploys-insite-ai-technology.html
  1. Microsoft New Zealand, “The Warehouse Group undertakes multi-year cloud migration aimed at significant cost reduction and productivity gains” (11 Nov 2024). URL: https://news.microsoft.com/en-nz/2024/11/11/the-warehouse-group-undertakes-multi-year-cloud-migration-aimed-at-significant-cost-reduction-and-productivity-gains/ .
  1. MicroStrategy Inc., “MicroStrategy Wins Two VIP Awards at NRF 2025” (News Release, 13 Jan 2025). URL: https://www.strategysoftware.com/news/microstrategy-wins-two-vip-awards-at-nrf-2025_01-13-2025 .
  1. Privacy Commissioner of New Zealand, “AI tools and the Privacy Act: Commissioner issues new guidance” (Media Release, Sept 2023). Discussed in IAPP News (21 Sept 2023). URL: https://iapp.org/news/b/privacy-commissioner-of-new-zealand-releases-guidance-on-interplay-between-privacy-act-ai .
  1. NZ Government (Digital.govt.nz), Public Service AI Framework (Feb 2025). URL: https://www.digital.govt.nz/standards-and-guidance/technology-and-architecture/artificial-intelligence/public-service-artificial-intelligence-framework .
  1. NewZealand.AI, “AI at Work: Key Insights from New Zealand’s Latest Workforce Reports” (26 May 2025). URL: https://newzealand.ai/insights/ai-at-work-key-insights-from-new-zealands-latest-workforce-reports .
  1. NZ Government (Beehive), “Government AI Strategy to boost productivity” (8 July 2025). URL: https://www.beehive.govt.nz/release/government-ai-strategy-boost-productivity .