Wall Street Braces for Major Job Cuts as AI Takes Over
In a significant shift for the banking sector, global banks are poised to cut up to 200,000 jobs over the next three to five years due to advancements in artificial intelligence (AI). According to a survey reported by Bloomberg Intelligence, chief information and technology officers from major banks anticipate a net reduction of approximately 3% of their workforce.
Positions most likely to be affected include those in back office, middle office, and operations roles, with customer services and know-your-customer duties also at risk. This trend follows a backdrop of modernization within the banking industry, driven by the need to enhance operational efficiency and reduce costs in the wake of recent financial crises.
A report from Citi highlighted that around 54% of positions in banking have a high potential for automation. Despite these anticipated job losses, some bank executives suggest that the introduction of AI could ultimately lead to increased jobs in the sector. Teresa Heitsenrether, overseeing AI initiatives at JPMorgan, stated that their adoption of generative AI has thus far resulted in job growth. Meanwhile, JPMorgan CEO Jamie Dimon expressed optimism, stating that future technological advancements could improve workers' quality of life significantly.
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