The impact of EX and CX with the introduction of AI

There’s a new employee in offices around the world, but this one you can’t really ask to join for lunch or invite them to join the 5pm knock off on Friday to the nearest watering hole. This employee is always working (sometimes never stops) and it constantly improving. However, this new employee can either be one of your most reliable team mate, or at some stage can even take over your job.

This uncertainty is why Artificial Intelligence (AI) is a double edged sword. Used one way, AI hands employees knowledge at their fingertips and the confidence to exercise real discretion without escalating every decision to a manager, which means a faster, better experience for the customer on the other end. Used another way, it quietly becomes the business case for redundancies, leaving the employees who survived to serve customers under a cloud of guilt and quiet dread about who is next. There is a balance though, and in this article we’re going to explore why this imbalance exist, and what is one thing we can do as CX leaders and practitioners to use AI for good.

The good: How good EX = good CX, and AI amplifies it

The link between employee experience and customer experience is one of the better-evidenced relationships in management research. Research done by Gallup, which now spans hundreds of thousands of teams over a decade worth of data, consistently finds that business units in the top quartile for employee engagement outperform the bottom quartile by roughly 10% on customer ratings and by more than 20% on profitability. It shows that an engaged workforce with a strong and positive Employee Experience (EX) and employee engagement has a strong relationship towards improvements on customer rating and profitability.

This is where AI can help improve employee engagement and employee experience, in turn improving the customer’s experience. A research by Erik Brynjolfsson, Danielle Li and Lindsey Raymond, who tracked the rollout of a generative AI assistant across more than five thousand customer support agents at a large software firm, found that access to the tool lifted productivity, measured as issues resolved per hour, by around 14% on average. The striking part is who benefited: the biggest gains, roughly 34%, went to the newest and least experienced staff, because the AI effectively distilled the tacit know-how of the best performers and handed it to everyone else. New hires moved up the experience curve faster, which is precisely the kind of thing that used to take months of nervous fumbling.

So in the right conditions, the technology lifts EX and CX at the same time, through the same intervention. This is just two research done on this topic, however it doesn’t analyse the implications of introducing this new “employee” in the workplace.

The bad: When AI causes redundancies and impact EX

The two research presented above points to one common factor: none of the benefits/gains require anyone to lose their job. Sure the after-call work disappears, and the AI team mate provides answers during a tough customer call: but none of those lead towards a strategy that involves redundancies. However, there is an alarming trend in the US and if history is an indicator, companies around the globe will follow: that is US employers announced 97,006 job cuts in May 2026, up 16% on April and the highest total for any May since 2020 (based on research from Challenger, Gray & Christmas). Of those, AI was cited in 38,579 cuts, roughly 40% of the month's total.

How about closer to home (which is Australia for us): Australia has had a louder 2026 than its size would suggest. After a comparatively quiet 2025, tech redundancies here accelerated so sharply that Sydney now sits third in the world for tech job losses, and AI has been named as the driver behind effectively every major Australian tech sacking of the year (in an article by David Braue on ACS).

The impact of these redundancies is starting to show: customer experience is degrading because the customer now experience a colder, slower, box-ticking version of the same service, from someone with one eye on their own future. Survivor guilt is real, and in some cases the impact is dire enough that organisations reverse their decisions and bring back employees because customers demand them to. In 2025 the Commonwealth Bank moved to cut 45 customer service roles on the strength of an AI voice bot it said had cut call volumes. Within weeks it reversed the redundancies and apologised, because the bot had not actually reduced the customers needing a human, and the complex, emotional calls still landed on people.

What does balance actually look like

Firstly, it is not easy to achieve this balance. It is a long-term vision with constant tweaks, but with the same focus in mind: that AI improves EX, and through it CX.

For leaders, here are some tips:

• Decouple the two decisions and say so out loud: The single biggest EX lever is telling people plainly whether AI deployment is or is not a redundancy programme. People only engage with a tool they are not afraid of.

• Recalibrate workload: If AI takes the easy tickets, the remaining mix is harder and heavier per interaction. Staffing ratios, handle-time targets and recovery time all need resetting for the new intensity.

• Change what you measure and reward: Frontline staff read your metrics as a statement of what the AI is for. Measuring deflection and average handle time alone tells them it is there to push customers away faster.

• Deploy AI as a coach, not a cop: The productivity and customer-sentiment gains shared earlier came from the fact that AI was used to coach the employees, and it is still their discretion on what steps to take next. Don’t use AI to monitor and score staff, that will degrade EX quickly.

Balance is when leaders refuse to use it as an excuse to cut headcount, when they invest in helping people actually use the tools, and when the efficiency is visibly reinvested in better work rather than fewer workers: the after-call admin disappears so an agent can solve the root cause, not just close the ticket.

Ultimately, technology (in this case AI) does not dictate how AI can impact EX, and ultimately impacting CX. It is a leadership choice and it always was.