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

Jan 10, 2025 - slashdot.org
A report from Bloomberg indicates that global banks may cut up to 200,000 jobs over the next three to five years as artificial intelligence (AI) takes over tasks currently performed by humans. According to Bloomberg Intelligence, chief information and technology officers expect an average net reduction of 3% in their workforce, with back office, middle office, and operations roles most at risk. AI is anticipated to transform rather than fully eliminate jobs, particularly those involving routine, repetitive tasks. Customer service functions and know-your-customer duties are also vulnerable to automation.

The report suggests significant changes in the banking industry, with potential improvements in earnings. By 2027, banks could see pretax profits increase by 12% to 17%, potentially adding up to $180 billion to their bottom line due to AI-driven productivity gains. A World Economic Forum survey also predicts workforce reductions as AI automates tasks, with 41% of employers planning to downsize. Unlike previous years, the 2023 report does not suggest that AI and other technologies will be a net positive for job numbers.

Key takeaways:

  • Global banks are expected to cut up to 200,000 jobs in the next three to five years due to AI encroachment on tasks currently done by humans.
  • Back office, middle office, and operations roles are most at risk, with AI transforming rather than fully eliminating these jobs.
  • AI-driven productivity could increase banks' pretax profits by 12% to 17% by 2027, potentially adding up to $180 billion to their bottom line.
  • 41% of employers plan to downsize their workforce as AI automates tasks, with generative AI expected to boost productivity and revenue by at least 5% in the coming years.
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