This article first appeared on GuruFocus.

WiseTech Global Ltd. (WTCHF) is undertaking what management describes as one of the most important inflection points in its more than 30-year history, with plans to cut about 2,000 roles nearly 30% of its 7,000-strong workforce as part of a deep AI transformation. Chief Executive Officer Zubin Appoo said artificial intelligence is unlocking levels of efficiency that were previously out of reach, reshaping the economics of software development and allowing greater productivity in less time and from fewer people. In areas such as customer service, roughly one in two roles could disappear, while teams in product and development including US-based E2open, acquired last year in the company's largest-ever deal are among the first to be affected. Appoo stated that the era of manually writing code as the core act of engineering is over, underscoring how central AI is becoming to WiseTech's operating model.

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The market response was immediate. Shares rose as much as 11% in early Sydney trading on Wednesday, after having declined 37% this year prior to the rebound amid concerns that advances in AI could make the company's freight-software redundant. The announcement also comes shortly after Citrini Research outlined a hypothetical future scenario involving large-scale AI-led corporate disruption, mass unemployment and economic contraction, reigniting what some have called the AI scare trade. WiseTech's move positions it among the most prominent Australian companies explicitly attributing large-scale job reductions to AI, alongside peers such as Commonwealth Bank of Australia that are also using artificial intelligence to displace certain roles.

From a financial standpoint, underlying net profit increased 2% to A$114.5 million for the six months ended Dec. 31, while total revenue climbed 76% to A$672 million, supported by a five-month contribution from E2open. On an organic basis, sales grew 7%. During the conference call, Appoo argued that while AI may threaten software companies that charge by user numbers, that risk does not apply to WiseTech because its platform sits at the center of global trade and logistics and is not an overlay that can simply be replaced. The workforce reductions are scheduled for this fiscal year and next, and management outlined a future in which specialist employees oversee swarms of AI agents embedded more deeply into customers' operations.

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