WiseTech Global Ltd. Chief Executive Zubin Apte stated that efficiency gains driven by artificial intelligence will eventually permeate all departments of the company. This announcement came just hours after the logistics software firm revealed plans to cut nearly 30% of its workforce over the next two years.
"We will examine all functions of the business," Apte said in an interview on Wednesday. "I firmly believe that AI and large language models will comprehensively enhance productivity across these functions. I cannot specify whether it will be 50%, 70%, or 30%."
Apte indicated that projects which previously required six to seven months to complete can now be finished in a single day. He also noted that deploying global customs system functionality in new countries, a process that once took up to two years, now occurs six to seven times faster with AI assistance.
Under this AI-driven transformation plan, WiseTech will eliminate 2,000 positions from its workforce of approximately 7,000 employees, marking one of the largest layoffs among Australian companies in this sector. While technology giants like Amazon and Meta are investing trillions of dollars to embrace AI, few companies, such as Sydney-based WiseTech, have implemented workforce reductions this early and on such a significant scale.
Apte has adopted an open and resolute approach to fully embracing AI, describing it as one of the most critical turning points in WiseTech's more than 30-year history.
He explained that AI enables higher productivity with fewer people and shorter timeframes. The company's cost structure will be fundamentally reshaped, and the business model for software development will be rewritten. Apte added that in certain roles, such as customer service, one out of every two positions will be eliminated.
"I can state unequivocally: the era of engineers whose core work involves manual coding is over," Apte declared, emphasizing that AI is unlocking previously unattainable efficiency gains for WiseTech.
On Wednesday, WiseTech's stock surged by as much as 11% during trading in Sydney. This rebound followed a 37% plunge earlier this year, driven by market concerns that AI could render the company's logistics software obsolete.
The large-scale layoffs occurred just days after a research firm called Citrini Research reignited what has been termed "AI panic trading." The firm's hypothetical future scenarios included AI triggering widespread corporate disruption, mass unemployment, defaults on software-related loans, and economic contraction.
Apte acknowledged that employees handling customer relationships and sales still require significant interpersonal communication. However, a growing number of companies worldwide are citing AI as justification for workforce reductions and hiring cutbacks. Software developers are likely to be among the most affected groups, as advanced AI can now perform tasks traditionally handled by humans, such as coding.
A Morgan Stanley study last month revealed that UK businesses experienced a net job loss of 8% over the past year due to AI, the highest rate among surveyed countries including Germany, the United States, Japan, and Australia.
During an earnings call, Apte stated that AI will enable WiseTech to deliver greater value and embed its products more deeply into customers' business processes. The workforce reductions will be completed within the current and next fiscal years.
In a presentation released on Wednesday, Apte outlined a future where professionals with specialized skills and knowledge remain crucial, but a significant number of AI agents will operate under human supervision.
WiseTech develops software that helps cargo owners and logistics companies plan and manage the global movement of goods, including container tracking and customs declarations.
Apte conceded that AI does pose a threat to other software companies that charge based on user numbers, but he asserted that this risk does not apply to WiseTech. He described the company's software as being at the core of global trade and logistics, making it irreplaceable. "It is not merely a simple add-on feature," he said.
Under what WiseTech calls its "deep AI transformation," employees in product development and customer service will be the first affected by layoffs. This includes staff from the U.S. subsidiary E2open, which was acquired in the company's most significant purchase last year.
For the six months ending December 31, the company's core net profit increased by 2% to 114.5 million Australian dollars (81 million U.S. dollars). Total revenue grew by 76% to 672 million Australian dollars, which included five months of consolidated revenue from E2open. Organic revenue growth was 7%.
Prior to the AI-related concerns impacting WiseTech's stock price, the company experienced a period of turbulence starting late 2024, when multiple allegations were raised regarding the conduct of then-CEO and founder Richard White.
Apte was appointed CEO last July, partly in response to investor concerns about corporate governance. White currently serves as Chairman of WiseTech.
Comments