Coles’ decision to outsource hundreds of corporate roles, many of them expected to move to India, has exposed a growing contradiction: while governments seek to reduce the number of workers entering the country, major employers are finding it increasingly practical to move the work offshore instead.
The supermarket group confirmed several hundred Australian corporate positions would be made redundant under an expanded agreement with consulting firm Accenture. The affected work will be divided between Accenture operations in Australia and overseas, with India expected to receive a large share.
“Some work in our corporate workforce will move to Accenture overseas and in Australia,” a Coles spokesperson said.
“The partnership will also help reduce costs in order to continue delivering value for our customers at the checkout.”
Coles said the arrangement would give it access to “global skills and resources” as it seeks to improve its digital services and reduce operating costs. Its supermarket and liquor store workers will not be affected.
The decision follows reports that Qantas is considering an Accenture-led restructuring that could affect as many as 1000 roles across marketing, finance, human resources and other back-office functions.
Qantas has said its discussions with Accenture are at an early stage, no formal agreement has been signed and no final decisions have been made. The airline has linked the talks to Project iQ, a program intended to accelerate the use of artificial intelligence and other technology across the business.
Taken together, the Coles and Qantas developments suggest Australian companies are entering a new phase of outsourcing. The old model was primarily about reducing wages by shifting repetitive processing work overseas. The newer model combines lower costs with access to large pools of technology, data and artificial intelligence workers who can perform more complex corporate functions from abroad.
The timing is notable. The Albanese government is considering further measures to reduce net overseas migration as pressure intensifies over housing, rents and infrastructure. Home Affairs Minister Tony Burke postponed a National Press Club speech this week after elements of a proposed migration package were not finalised.
Business groups have cautioned against measures that could restrict skilled migration, warning that mining, construction and other industries remain dependent on overseas workers. Several Labor MPs have also urged the government to avoid cuts driven mainly by political pressure from One Nation.
At the same time, employers seeking to bring skilled workers into Australia face higher salary thresholds, increased visa charges, labour market testing requirements and a new order of processing priorities.
From July 1, the minimum salary thresholds applying to employer-sponsored skilled visas rose by 3.9 per cent. The Core Skills Income Threshold increased to $79,499, while the Specialist Skills Income Threshold rose to $146,717. Visa application charges also increased.
Employers sponsoring workers through relevant visa streams must generally demonstrate that they have first tried to recruit an Australian worker. Labour market testing usually requires positions to be advertised nationally for at least four weeks before a nomination is lodged.
These requirements do not prevent businesses from sponsoring overseas employees, and there is no verified government direction instructing companies to hire workers offshore because of the housing crisis.
However, recruiters say the combination of higher costs, tighter eligibility and changing corporate attitudes towards remote work is altering employer behaviour.
A Melbourne recruitment industry professional involved in sourcing overseas technology workers told The Indian Sun that some employers were finding it increasingly difficult to bring staff into Australia. She said the experience of the pandemic had also changed the calculation for companies hiring IT workers
A Melbourne recruitment industry professional involved in sourcing overseas technology workers told The Indian Sun that some employers were finding it increasingly difficult to bring staff into Australia. She said the experience of the pandemic had also changed the calculation for companies hiring IT workers.
Many technology employees brought to Australia had spent much of their time working remotely, she said. Employers were therefore asking why a worker performing a largely home-based role needed to relocate to Australia at all when the same work could be completed from India or another offshore centre.
That observation points to a change that extends beyond visa policy.
Remote work proved that many finance, technology, administration, human resources and marketing functions could be performed away from a company’s headquarters
Remote work proved that many finance, technology, administration, human resources and marketing functions could be performed away from a company’s headquarters. Once physical proximity became less essential, employers gained another option: instead of sponsoring a worker to move to Australia, they could engage an overseas team through a consultancy or offshore subsidiary.
The worker remains overseas. The company avoids relocation costs, visa administration and some Australian employment expenses. The employee also does not add to local demand for housing, transport or public services.
The economic cost is that the salary, income tax and much of the employee’s household spending also remain overseas.
Australia may therefore reduce population pressure while losing the domestic economic activity that would have accompanied the worker.
Coles employs about 115,000 people, meaning the proposed job losses represent a small share of its total workforce. But the positions being moved are important because corporate roles in technology, finance, data and marketing often provide career entry points for graduates and pathways into senior management.
University of Technology Sydney researchers warned in June that Australia risked losing parts of its “corporate brain” as companies including Telstra, NAB, Officeworks and Woolworths reduced local positions while building larger workforces in India, the Philippines and Vietnam. The long-term concern was not simply the number of jobs lost, but the disappearance of early-career roles through which Australians acquire experience and progress into leadership.
Artificial intelligence is accelerating that change. Companies are examining which tasks can be automated, which require human oversight and where the remaining work can be performed most cheaply. Consulting firms such as Accenture can offer automation, offshore labour and organisational restructuring under one contract.
For employers, that can appear more efficient than recruiting workers individually, sponsoring visas and placing them in one of the world’s most expensive housing markets.
For Australia, the consequences are less straightforward.
Lower migration can ease some demand for rental housing. But if skilled work is sent offshore rather than transferred to Australian employees, the country may lose jobs without developing the local workforce intended to replace migration.
The government’s challenge is therefore larger than selecting a migration number.
Australia must decide which capabilities it wants located within the country, how it will train people for those roles and whether businesses should receive stronger incentives to retain high-value work locally.
It must also distinguish between jobs that genuinely require workers to be in Australia and those that can be performed from anywhere.
Coles says outsourcing will help it access global expertise and continue offering value to shoppers. That is a legitimate commercial objective in a highly competitive retail market.
Employees whose jobs disappear will see the value calculation differently.
The Coles decision also raises a question that has received little attention during the political argument over migration.
If Australia makes it harder or more expensive to bring workers to the jobs, will companies invest in training Australians to fill them, or will they simply send the jobs to the workers?Qantas and Coles suggest the second option is already being tested.
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