National Australia Bank (NAB) is expanding its technology workforce in India and Vietnam while preparing to cut around 2,500 jobs in Australia, according to a report in The Australian. The lender plans to add at least 180 new offshore roles in the coming months, and expects those positions to be insulated from the domestic cuts.
The move comes as NAB, like many large banks, rolls out more artificial intelligence tools. While AI is often seen as a way to automate tasks, the bank's hiring plans suggest it still needs plenty of human engineers to build, integrate, and maintain the systems that power those tools.
Why offshore?
The pay gap is a big part of the story. The Australian reported that junior software engineers in Vietnam earn about AU$20,000 a year, compared with at least AU$80,000 in Australia. That difference can significantly lower the recurring cost of developing and maintaining internal software systems.
NAB has already been building a pipeline of tech talent in Vietnam. Since 2021, about 700 graduates have completed its StarCamp program, and more than 90% of them later joined the bank, according to the report. That suggests NAB sees Vietnam as a reliable source of skilled workers, not just a short-term cost-saving experiment.
This is not an isolated trend. Many global banks and tech companies have been shifting software development to lower-cost countries for years. But the rise of AI is adding a new dimension. AI doesn't remove the need for engineers; it often shifts it. As banks deploy AI models, they still need people to integrate those models into customer apps, manage data, monitor risks, and ensure everything stays compliant and secure.
What it means for investors
For bank investors, this is a reminder that the AI race is as much about cost structure as it is about new products. If NAB can staff a bigger share of software work in lower-wage markets while keeping output steady, its operating expenses can grow more slowly than its technology footprint.
That can change what drives earnings. Instead of profitability hinging mainly on loan growth and interest margins, it becomes more sensitive to day-to-day expense discipline. And if peers follow, investors may start judging banks less on who talks most about AI and more on who can scale it without letting the cost line rise in lockstep.
The job cuts in Australia are part of a broader cost-saving effort. Banks often announce workforce reductions when they invest in automation and digital tools, arguing that new technology lets them do more with fewer people. But such moves can also attract political and regulatory attention, especially when they involve significant domestic job losses.
For everyday investors, the key takeaway is that AI is not just a buzzword for banks. It is reshaping where they hire, how they spend, and ultimately how profitable they can be. Watching how NAB manages this transition will offer clues about the future of the entire banking sector.
As the bank continues to build out its AI capabilities, investors will likely watch for updates on cost savings, hiring plans, and any signs that the offshore expansion is affecting service quality or risk management. The balance between cutting costs and maintaining strong operations will be a key theme in the coming quarters.
