One of the first countries to heavily rely on AI in administration to lay off 10% of employees: “Our government is as frustrated as you are with the slow adoption of technologies”
The wave of layoffs attributed to the adoption of artificial intelligence has also reached New Zealand's shores. The country's government has announced a civil service reform that will make the use of AI technology a “basic expectation” for agencies and eliminate thousands of jobs.
New Zealand's Finance Minister Nicola Willis announced the job cuts in a speech in which she lamented the fact that the public administration is made up of 39 departments and ministries.
Romania has as many ministries as Australia, which has an economy 4 times larger than ours
She pointed out that in Australia, New Zealand's much larger neighbor, there are 16 departments and ministries, while in Great Britain the number is 24. Australia basically also has 16 ministries, as does Romania. But Australia has a GDP 4.4 times higher than Romania. In addition, Romania has over 1,000 state agencies and companies.
Turning to the New Zealand minister, she said the new AI adoption plan would make it possible to cut 9,000 jobs – the equivalent of around 14% of New Zealand's current public sector workforce.
Willis characterized the country's public service as “scared of AI, slow to transition to the cloud” and said it operates a “complex and fragmented set of overlapping IT solutions”, according to The Register
The government in Wellington plans to cap departmental budgets and says, along with staff cuts, it will save NZ$2.4 billion (US$1.4 billion) over four years.
New Zealand has a population of about 5.3 million inhabitants.
Layoffs due to AI have been announced so far mostly by private companies
The Register recalls that numerous tech companies, as well as from other sectors, have made significant layoffs that they justify by the need to create an adequate workforce for the AI era. The explanation has been used to justify major discounts at Meta, Amazon, Cloudflare and Cisco, among others.
But few governments have followed suit. An early and highly publicized attempt – the so-called “Department for Government Efficiency” (DOGE) led by Elon Musk in Donald Trump's cabinet – sought to use AI to improve government operations.
Musk officially left DOGE at the end of May last year, and the department left behind little evidence that it had succeeded in significantly reducing federal government spending.
New Zealand is a country rich in resources and of outstanding natural beauty, but it has a modest tax base and residents expect a high level of public services. Minister Willis' plan is therefore a major bet on AI.
New Zealand wants AI to become a core technology in the public sector
“Our government is as frustrated as you are with fragmentation, complexity, the status quo mentality and the dangerously slow adoption of digital technologies and AI,” she added.
New Zealand's response is to ask its chief digital officer to “embed AI implementation as a core expectation for all public entities”.
Minister Willis also referred to a “recent trial of an AI transcription tool in hospital emergency rooms, which reduced the time clinicians spent on notes and increased time spent with patients”. He said this is an example of the type of initiatives he hopes to expand.
She promised that the planned reform would “reduce the number of government departments, increase the use of AI and other digital tools and generate significant savings”.
If we make a direct comparison between New Zealand and Romania, we have a 70% higher GDP, but with a population 3 times larger than the country in the southern hemisphere. Per capita, New Zealand's GDP is twice that of Romania's.
