Wall Street Job Losses May Top 200,000 As AI Replaces Roles

An anonymous reader quotes a report from Bloomberg: Global banks will cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, according to Bloomberg Intelligence. Chief information and technology officers surveyed for BI indicated that on average they expect a net 3% of their workforce to be cut, according to a report published Thursday. Back office, middle office and operations are likely to be most at risk, according to Tomasz Noetzel, the BI senior analyst who wrote the report. Customer services could see changes as bots manage client functions, while know-your-customer duties would also be vulnerable. 'Any jobs involving routine, repetitive tasks are at risk,' he said. 'But AI will not eliminate them fully, rather it will lead to workforce transformation.'

Nearly a quarter of the 93 respondents predict a steeper decline of between 5% and 10% of total headcount. The peer group covered by BI includes Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. The findings point to far-reaching changes in the industry, feeding through to improved earnings. In 2027, banks could see pretax profits 12% to 17% higher than they would otherwise have been -- adding as much as $180 billion to their combined bottom line -- as AI powers an increase in productivity, according to BI. Eight in ten respondents expect generative AI to increase productivity and revenue generation by at least 5% in the next three to five years. Results from a recent World Economic Forum survey also predicted a reduction in the workforce due to AI. According to the survey, 41% of employers intend to downsize their workforce as AI automates certain tasks.

Unlike the survey results from 2023, this year's report did not say that most technology, including AI, were expected to be a 'net positive' for job numbers.

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