Bank executives from London to New York to Hong Kong are all anticipating the coming transformation in the industry as they announce plans to automate swaths of their employees. In Australia, the country’s largest bank has endured an embarrassing retreat of its own. The Commonwealth Bank of Australia (CBA) has been forced to rehire 45 employees after it was revealed the roles were not actually made redundant by artificial intelligence, as the bank had previously said. The U-turn comes after a Finance Sector Union (FSU) challenge of the decision in a Fair Work Tribunal.

As The Guardian reported, dozens of long-serving staff had been told their positions were no longer required after the bank said it had been inundated with fewer calls. In a statement to the tribunal, CBA admitted its AI-powered “voice bot” had in fact cut incoming calls by around 2,000 a week. This reduced the need for employees to respond to queries, according to the bank, which meant the same number of people would not be required. Many of the staff in question had worked at the bank for decades, so the news was particularly tough for some of the employees.

Yet, some of the 45 people given the news are not buying it. Instead of fewer calls, they point to data that shows that the demand for call services was, in fact, increasing at the time the job losses were first mooted and executed. In the lead-up to the job losses, according to staff, there was in fact a shortage of people available to take the calls. Managers were reportedly redeployed to the call center, and those who were able to work extra shifts were being given overtime to meet the demand.

In its tribunal complaint, the union alleged that CBA did not properly explain its decision-making in regards to which roles were determined to be redundant. The FSU has further alleged that the bank was instead using the chatbot story as a pretext for moving some of the roles to India, where the bank was also hiring staff to perform the same work. “This gives the impression to workers that the chatbot is being used as a pretext for these roles going offshore,” the union said.

The case took a dramatic turn after CBA officials conceded during the tribunal hearing that staff had actually been dealing with a sustained increase in call volumes at the same time as they were being made redundant. The bank said it did not take the ongoing increase in calls into account when determining the decision to make the roles redundant, according to the Financial Times. In a tribunal, the bank further conceded, “This error meant the roles were not redundant.”

In a statement to Bloomberg, CBA acknowledged it had erred and would be undoing the layoffs. It has apologized to staff and has confirmed that those whose jobs were cut will be offered positions going forward. “We have apologized to the employees concerned and acknowledge we should have been more thorough in our assessment of the roles required,” a spokesperson said. The bank also said employees will now have the options of returning to their old jobs, applying for other positions within the bank, or, if they choose, taking the payout package they were previously offered.

The FSU was able to paint the announcement as a “massive win for our members,” but noted that the harm was already done. Some workers faced weeks of uncertainty, wondering if they could still afford to pay their mortgages and other expenses. The union has since said the episode should serve as a warning against banks rushing into AI systems and letting cost savings get in the way of common sense.

For its part, the bank has so far shown no sign of slowing down its drive to incorporate AI into the business. In fact, CBA was also announcing the same day of the news it was cutting the 45 jobs that it had inked a deal with OpenAI to pursue further AI initiatives. The new partnership, which CBA says has been in the works for over a year, will aim to develop AI products that are based on OpenAI’s large language model called GPT-4. CBA said it is also investing in staff to develop new roles and better incorporate new technologies in the bank. The bank further stated, “This collaboration is just the beginning. It will allow us to embed the responsible use of AI in our business and get ahead of the rapidly evolving landscape.”

On a global scale, the move by CBA to re-hire staff after blundering into a layoff debacle is likely to have a limited impact on the overall trajectory of the banking industry. Analysts with Bloomberg Intelligence have estimated that banks could slash as many as 200,000 jobs over the coming three to five years as AI systems take over a range of back office, middle office, and operations jobs. CBA may be struggling to contain the damage in the short term, but AI is likely to be a long-term existential threat to the jobs of some banking staff as financial institutions seek to streamline their operations.