Hiring freezes in Australia: what HR teams report in 2026

As budget pressures start to bite, Australia has seen a slew of hiring freezes across both the public and private sectors. Whether due to falling revenue, AI adoption, policy changes, mergers, or cost pressures, it’s becoming harder for HR teams to recruit in the current market. 

While a hiring freeze can be a sensible short-term alternative to layoffs in Australia, it also presents challenges for HR teams. They need to balance business needs against available resources, manage the current recruitment pipeline, mitigate the risk of burnout, work harder to retain staff, and support internal mobility so that crucial outputs are still delivered. 

A hiring freeze is a temporary pause on recruitment, usually implemented to ease cost pressures. On the one hand, it means that no new external hires are made, but on the other it protects existing staff from redundancy. Open roles may be filled through internal redeployment or upskilling, or left vacant. 

There are different types of hiring freeze: 

• A total hiring freeze is a blanket ban on hiring across the company.
• A departmental hiring freeze only affects certain departments, while others continue to hire as usual.
• A new role freeze means that departing employees are replaced, but no new positions are created.

When implementing a hiring freeze, HR teams must bear in mind that the work still needs to be done. When staff leave and aren’t replaced, their work is absorbed by remaining staff, who may become burnt out. That in turn can lead to resentment, low morale, and higher turnover, resulting in more empty positions and even more pressure on those who remain. 

There’s also the productivity gap. When roles aren’t filled and work isn’t done, there’s a cost involved in lost output. Left unchecked, that could significantly eat into the savings gained by the hiring freeze. To mitigate this, targeted hiring freezes, focused on protecting revenue-critical departments and roles, rather than organisation-wide freezes, can help to protect revenue. 

It’s also important to consider any reputational damage before implementing a hiring freeze. If a business stops recruiting for a while, or publicity leads potential applicants to think the business is facing financial difficulties, it can make recruitment more difficult when the freeze comes to an end. 

Finally, a blanket hiring freeze can prevent the business from recruiting into key roles – those that could actually have a big impact on turning around the company’s fortunes and getting it back on track. That’s why a well-considered, thoughtfully planned hiring freeze is generally more successful than knee-jerk hiring bans. 

There’s no universal time limit on a hiring freeze in Australia. On average, they usually last from a few months to a year, depending on the savings target. It isn’t necessary to have a deadline in mind when implementing a hiring freeze, but it is necessary to monitor progress against goals so that the freeze can be lifted when the situation reverses and the business is in a position to start hiring again.

A hiring freeze is only ever a short-term measure. If the expected benefits fail to materialise, a hiring freeze can escalate into a redundancy process. When layoffs become a likely outcome, organisations should look at working with an outplacement partner to ensure the terminations are conducted lawfully and with empathy for the people involved.

Research from the Australian HR Institute noted in March that 59% of organisations were planning to hire in the next quarter, down from 71% in the previous quarter. By June, their Quarterly Australian Work Outlook noted that 22% of employers were introducing recruitment freezes or slowdowns and 15% were not planning to replace leavers. 

Globally, multinationals such as Microsoft and Unilever have frozen hiring. Global tariffs led to uncertainty, which was further heightened by the Iran war. Unilever blamed its recruitment pause on “macroeconomic and geopolitical realities,” while Microsoft paused “to manage costs against record AI infrastructure spending.” Australian organisations initiating recruitment freezes are far from alone. 

According to a Fortune survey in March 2026, 66% of CEOs planned to freeze or cut hiring in 2026. This was blamed on cost cuts needed to fund investment in AI, with no short-term ROI expected. 

Below the surface are suspicions that AI is the excuse that masks more serious business challenges, because the firms investing heavily in AI are actually expanding and hiring, rather than shrinking. 

At a federal level, agencies have been asked to identify budget savings, which has led them to delay recruitment and pause hiring for non-essential roles. Changes to the international student visa policy have impacted revenue at universities, impacting staffing at early career level. 

Different reasons, yet all leading to the same outcome: hiring freezes and recruitment slowdowns.

Hiring freezes are impacting both the public and private sectors. 

• Atlassian hiring freeze: Early in 2026, Atlassian paused hiring for engineers and related roles, following a net loss of US$42.6 million in the final quarter of 2025, to enable it to address challenges arising from AI adoption. 

• ANZ hiring freeze: Following a hiring freeze in 2025, ANZ Bank later announced a restructure and redundancy exercise with a forecast loss of 3,500 jobs by September 2026.

• APS hiring freeze: While there is no official hiring freeze at the moment in the Australian Public Service, there has been a notable slowdown in hiring, and many departments face challenging budget targets that are likely to impact recruitment. For example, the government of South Australia stated a desire in their summer budget to save $120 million a year by not replacing non-frontline roles when staff resign. 

• DCCEEW hiring freeze: The Department of Climate Change, Energy, the Environment, and Water has paused recruitment for new positions and is also offering voluntary redundancies to bring its workforce into alignment with its budget. 

With hiring freezes falling on the shoulders of the HR department, they need to know how to manage it well – achieving organisational objectives while also meeting the needs of the people involved and positioning the business for future success. 

Before announcing a blanket hiring freeze, set the scope of the freeze based on current business needs. Decide whether roles will be backfilled, which departments will be affected, and whether key hires will still continue. 

Consider likely natural attrition and the cost of vacant roles to avoid over-freezing. Model potential financial scenarios to help select the best route forward. 

Open communication minimises risk. Communicate the reasons for the freeze and provide context to avoid damaging morale that leads to panic exits and reputational damage. This communication should extend to candidates already in your recruitment pipeline, as well as existing staff. 

Ensure that work left hanging due to vacant roles is redistributed fairly. Provide opportunities for reskilling and upskilling, which benefits staff with the potential for career progression or redeployment, as well as ensuring vital work still gets done. 

Recognise staff that take on additional work to cover vacant roles, not just offering praise and thanks but also noticing when overwhelm and burnout become a risk. 

Throughout the hiring freeze, track metrics such as attrition, morale, and budget, so that mitigating measures can be put in place before the freeze becomes problematic and the initiative can be wound up as soon as possible. 

When the metrics show that the goal has been met, it’s time to start hiring again. That’s not something that will happen overnight, especially as the pipeline will have tailed off. It’s likely that hiring will take more time and resources in the beginning. 

Confirm that paused requisitions are still required, as priorities and roles may have changed during the freeze. Re-engage any candidates from the pre-freeze pipeline and prioritise key roles. 

Communication is just as important at this stage as it was at the beginning, as it shows to your existing staff, as well as potential candidates and the rest of the world, that you’re opening up to hiring again.  

A hiring freeze isn’t the only option for businesses looking to cut costs. Consider these options too: 

• Redundancy: Often considered the nuclear option, redundancy reduces workforce costs by eliminating roles entirely. Organisations considering layoffs in Australia should first speak with an outplacement provider, such as Careerminds, before making job cuts, to protect reputations and minimise risks. 

• Quiet hiring: Rather than a hiring freeze, quiet hiring means that new staff are taken on temporarily (such as contractors or temps), moved to short-term projects from elsewhere in the business, recruited on a part-time basis, or work remotely or off-shore. All of these can be more cost effective than recruiting a full-time, permanent member of staff. 

• Redeployment: Staff can be redeployed into business-critical roles from elsewhere in the business, eliminating the cost of hiring into that role whilst offering internal mobility and skills development. This can be a sensible option to retain knowledge and reduce recruitment costs if downsizing hits only a few departments. 

• Slow hiring: Instead of freezing hiring, HR teams take longer to recruit. Slowing down hiring means that they can take the time to find the perfect person for every role, reducing the risk of bad hires and the rate of headcount growth. 

• Compensation adjustment: Cuts are found elsewhere in the recruitment and promotion process – for example by re-banding roles, delaying promotions, and revisiting the benefits on offer. 

• Cost cutting elsewhere: Before implementing a hiring freeze, with the risks that entails, look for other areas of the business where costs could be reduced without impacting reputation, productivity, and morale.

When workforce changes are on the horizon, it helps to have an expert partner working alongside your HR team to minimise risk, protect your business, and take the strain. 

Careerminds has over 15 years’ experience in supporting businesses through redundancies, redeployments, and internal mobility initiatives. Contact us today to find out how we can protect your business and your people.