WiseTech Global to Cut 2,000 Jobs in AI-Driven Engineering Pivot
Australian logistics software giant WiseTech Global is slashing 29% of its workforce as it transitions from manual coding to AI-orchestrated development. The move follows a period of significant stock volatility and aims to integrate the recently acquired E2open while boosting operational efficiency.
Mentioned
Key Intelligence
Key Facts
- 1WiseTech Global to cut 2,000 jobs, representing 29% of its 7,000-person workforce.
- 2The layoffs will be phased over the next two years across 40 countries.
- 3U.S. subsidiary E2open may see workforce reductions of up to 50%.
- 4H1 underlying net profit reached $114.5 million, beating market consensus by 6%.
- 5Shares jumped 10.7% to A$47.60 following the announcement.
- 6The company has seen a 70% share price decline since November 2024.
Who's Affected
Analysis
WiseTech Global’s announcement that it will eliminate approximately 2,000 roles—nearly a third of its global workforce—marks a watershed moment for the Australian technology sector and the broader logistics software industry. This restructuring is not merely a cost-cutting exercise; it is a fundamental bet on the obsolescence of traditional software engineering. CEO Zubin Appoo’s declaration that "the era of manually writing code as the core act of engineering is over" signals a paradigm shift where artificial intelligence moves from a supportive tool to the primary engine of product development. By automating routine administrative tasks and complex coding functions, WiseTech aims to maintain its market leadership while drastically reducing its human overhead.
The timing of this pivot is critical for WiseTech’s market standing. The company’s shares have endured a punishing 70% decline since hitting record highs in November 2024, largely due to governance concerns and personal scandals surrounding founder and former CEO Richard White. The market’s reaction to the layoff news—a 10.7% surge in early trading—suggests that investors are prioritizing efficiency and the promise of AI-driven margins over the immediate social and operational costs of such a massive reduction. The company’s first-half underlying net profit of $114.5 million, which beat Jefferies' consensus estimates by 6%, further bolstered the narrative that WiseTech remains a high-performance entity despite its recent leadership turmoil.
The company’s first-half underlying net profit of $114.5 million, which beat Jefferies' consensus estimates by 6%, further bolstered the narrative that WiseTech remains a high-performance entity despite its recent leadership turmoil.
A significant portion of the restructuring will target E2open, the U.S.-based cloud computing firm WiseTech acquired for $2.1 billion in August. With potential cuts of up to 50% at E2open, WiseTech is signaling a rapid and aggressive integration strategy. The acquisition was intended to expand WiseTech’s footprint in the global supply chain, but the current plan suggests that the company believes it can operate E2open’s infrastructure with a fraction of its original 3,873-person workforce by leveraging AI automation. This mirrors a broader trend among global tech giants, such as Amazon, which recently announced 16,000 job cuts as part of a second round of redundancies, highlighting a shift toward leaner, AI-centric organizational structures.
However, the transition is not without significant risk. Reducing product and development teams by half could potentially lead to technical debt or a slowdown in innovation if the AI tools do not perform as anticipated. Customer service roles are also on the chopping block, which could impact the high-touch relationships that logistics firms often require for complex software implementations. The next two years will be a test of whether a software company can truly replace the "core act of engineering" with automated systems without compromising the integrity of its platform.
Looking forward, WiseTech’s strategy will likely serve as a blueprint for other enterprise software providers. If the company successfully integrates AI into its internal operations and customer-facing software while maintaining its growth trajectory, it will validate the "efficiency first" model that has become the new standard in Silicon Valley and beyond. Analysts will be watching closely to see if the reaffirmed full-year guidance holds as the workforce reductions begin in earnest. For now, WiseTech has successfully shifted the narrative from leadership scandals to technological evolution, but the execution of this AI-led revamp will determine its long-term viability in an increasingly automated global economy.