6 December 2022

Services Australia lays off hundreds of contractors before Christmas

| Chris Johnson
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More than 1000 Services Australia contractors have lost their jobs. Photo: Michelle Kroll.

More than 1000 contractors are being laid off at Services Australia, with many losing their jobs with little notice right before Christmas.

Notices of termination have already been issued to hundreds of contractors, mostly highly paid ICT specialists, as the Federal Government begins the rollout of its cost-cutting on the massive consultancy spend in the Australian Public Service.

Consultancy firms providing many of the staff were notified as late as Friday that their workers were being laid off.

The smaller people placement firms are being targeted first.

Some employees are now describing the agency as the Christmas Grinch, while others say it is a repeat of the Gershon Review’s recommendations – a razor gang approach to digital workforce contractors – which were implemented by the Rudd Government late in 2008.

With a number of projects coming to an end, and with that the requirements for specialist contractors working on those projects, Services Australia is taking an administrative approach, having already extended some of the contracts.

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The ICT specialists were mostly used on infrastructure projects to help with the aged care and pandemic services, which have now been completed.

In answer to questions from Region, Services Australia general manager Hank Jongen said a number of commercial ICT contracts recently reached the end of their requirements.

“The contracts were for the provision of specialist ICT expertise to support Services Australia’s response to the COVID pandemic and the delivery of major projects such as the Welfare Payment Infrastructure Transformation and the Residential Aged Care Funding Reform. These projects have now come to an end,” he said.

“This means up to 1,000 ICT contractors are ceasing over the next few weeks. All impacted contracts will end in line with the relevant terms and notice periods.

“The contractors impacted by this change have provided specialised expertise and advice through a challenging few years. They’ve supported us to significantly bolster our ICT systems to meet unprecedented demand on our systems and services during emergencies such as the pandemic, and we thank them for their work.

“These contractors are highly skilled professionals, working in a high demand field in the current tight employment market. In addition to offering support to those impacted, both directly and through their employment provider, we’ve also reached out to other APS agencies who may be in a position to offer new opportunities.”

Contractors working remotely appear to be the first to go, which will also put a huge dent in the push for more flexible working arrangements across the APS.

One source told Region that a strategy was underway for wholesale removal of contractors to keep the Government happy and to save money.

“They are in a budget hole and it is too hard to get out of contracts with the big providers at the moment, so labour hire is easy low-hanging fruit,” the contact said.

“Services Australia is a good place for the Government to start making savings.”

Another noted the ruthlessness of the timing.

“It’s not great to get this kind of news right before Christmas,” they said.

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“Layoffs before Christmas are a cold-blooded move. This is definitely starting to look a lot like Gershon 2.0.”

And yet another contact said: “This is very Grinch-like. Many of us have seen this before.”

With the Christmas shutdown fast approaching, contractors will be hard pressed to find work for at least six weeks, with many now bracing for a tough festive season.

“This is very much the market correction we needed to have, but it is very harsh,” one source told Region.

The Association of Professional Staffing Companies (APSCo Australia) was also contacted for comment.

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It isn’t just Services Australia laying hundreds of people off.

Given that the work these contractors still needs to be done, I imagine that quite a few of them will be offered jobs by the government department.

Capital Retro4:30 pm 29 Nov 22

So, is that agency going to change its name to “Reduced Services Australia” from now on?

Whilst it is the nature of Projects and Contract engagements to end, bulk culling 1000 jobs in a short period creates big issues for employees as well as smaller consultancy agencies. There is demand within the market for professional services however its not reasonable to expect market to adsorb these roles immediately, especially if alternate agencies are also reducing their Contractor footprint. It is not digestible that this is the result of multiple Projects and engagements coincidentally ending at the same time, this was a decision. Perhaps a tapered approach would provide a more considered outcome in the future, particularly from an agencie that has a major function servicing unemployment.

Finagen_Freeman3:00 pm 29 Nov 22

There’s a reason they are contractors, and are “mostly highly paid ICT specialists” – they get remunerated well enough to manage the periods the ACT retreats into sleepy hollow.

Felix the Cat7:20 pm 29 Nov 22

Not neccessarily, they would probably be earning more if they were actually employees of Services Australia or other government department

Absolutely, definitely, 100%, would not be earning more as employees!! Generally speaking, these contractors are earning about 1.5x -> 2x the income of their APS peers

As a general rule, these contractors earn 1.5 -> 2x the income of their APS peers……. with their vendor also tacking on a sizeable charge on top of their personal wage

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