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European banks plan to cut 200,000 jobs as AI takes hold
European banks may cut over 200,000 jobs by 2030, constituting about 10% of their workforce, as they adopt AI for efficiency gains. The most affected roles will be in back-office operations, while banks express a need for caution in ensuring junior staff learn essential skills.
Key points
- Morgan Stanley predicts a job reduction of 200,000 in European banking by 2030 due to AI adoption.
- Approximately 10% of the workforce at 35 major European banks will be impacted.
- The most significant cuts will occur in back-office operations, risk management, and compliance.
- Banks expect efficiency gains of 30% from AI integration.
- Job cuts are not limited to Europe, as U.S. banks like Goldman Sachs indicate similar measures.
- ABN Amro plans to reduce its staff by 20% by 2028.
- Caution is advocated by some banking leaders about the long-term implications of cutting junior roles.
Why it matters
- This trend mirrors the ongoing technological shift in industries, emphasizing automation and efficiency.
- Historically, previous technological advances have led to workforce reductions in various sectors.
- The shift towards AI in banking is aligned with broader IT trends focusing on automation and machine learning.
- Many companies are undergoing digital transformations, spurred by advancements in AI and data analytics.
The banking industry's shift toward AI is set to result in significant job losses, raising concerns about foundational training and the long-term health of the workforce amid rapid technological advancement.