Wall Street Could Cut 200,000 Jobs Due to AI Advancements
A recent report from Bloomberg Intelligence warns that Wall Street may see job cuts of up to 200,000 over the next three to five years as artificial intelligence (AI) increasingly automates tasks currently performed by humans. The survey conducted among chief information and technology officers revealed that, on average, firms expect a 3% reduction in workforce. Approximately 25% of respondents anticipate declines of between 5% and 10%.
Sectors at the greatest risk include back office operations and middle office functions, with customer service roles also facing potential changes as AI-driven bots take over various tasks. Tomasz Noetzel, a senior analyst for Bloomberg Intelligence, noted that jobs involving routine and repetitive actions are particularly vulnerable. However, he emphasized that this evolution will lead to transformation rather than complete elimination of positions.
The impact of AI is projected to enhance bank productivity significantly, potentially increasing pretax profits by 12% to 17% by 2027 and adding around $180 billion to their collective earnings. Major players, including Citigroup, JPMorgan Chase, and Goldman Sachs, are already investing heavily in AI tools to boost efficiency.
Despite concerns about job displacement, many firms assert that technology will change the nature of existing roles rather than entirely replace them. JPMorgan's AI lead stated that the bank's current adoption of generative AI is aimed at augmenting jobs, suggesting a focus on improving the quality of work instead of simply cutting positions.
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