NEW YORK — Financial services companies are increasingly acknowledging that advances in artificial intelligence could lead to smaller workforces in the coming years.
Several major banks and financial technology firms have signaled that AI-driven productivity gains could allow them to operate with fewer employees, even if job cuts are not always immediate.
As the CU Daily reported earlier, fintech company Block said last month it would reduce its workforce by about 40%, or roughly 4,000 jobs, citing the growing capabilities of AI models as a major factor in the decision, Fortune reported.
At large banks, executives have suggested the technology could slow hiring rather than trigger abrupt layoffs.
Brian Moynihan, chief executive of Bank of America, said the bank can increasingly “do more with the same amount of people or less people” as it expands its use of AI.
‘Gradual’ Shrinkage
Speaking during a January earnings call with analysts, Moynihan said the company may allow its workforce to gradually shrink through attrition rather than active layoffs.
“We can just make decisions not to hire and let the headcount drift down,” he said.
Executives at other banks have expressed similar views.
Charlie Scharf, chief executive of Wells Fargo, said in December that the bank is already performing more work through AI tools and could eventually operate with fewer employees.
“It’s not going to totally replace humans but does create an opportunity to do things significantly different,” Scharf said, according to Fortune.
At JPMorgan Chase, managers have been instructed to limit hiring as the bank rolls out new AI systems, Fortune reported. The company has deployed a large language model that is used by roughly 150,000 employees each week.
Chief executive Jamie Dimon has said productivity gains from AI could eventually result in a smaller workforce.
‘Constrained Headcount’
Other financial firms have also signaled changes to staffing plans.
Goldman Sachs told employees in an October memo that it would “constrain headcount growth” while also eliminating a limited number of positions as part of broader efforts to reorganize around AI.
“To fully benefit from the promise of AI, we need greater speed and agility in all facets of our operations,” CEO David Solomon wrote in the memo, according to Fortune.
Recent payroll reductions have also been reported at Citigroup and Morgan Stanley, though those companies did not attribute the cuts to AI.
Similar workforce changes are occurring across other industries. Salesforce eliminated about 4,000 customer support roles last year as it expanded the use of AI tools, while Pinterest laid off nearly 15% of its staff as part of a shift toward AI-focused roles, Fortune reported.
Some Skepticism Expressed
Some Wall Street analysts, however, have grown skeptical of job cuts attributed to AI, suggesting companies may also be adjusting staffing levels after hiring heavily during the COVID-19 pandemic.
At the same time, research from LinkedIn cited by Fortune suggests demand is rising for skills tied to communication and creative thinking.
“Companies are increasingly looking for great communicators, because strong writing, clarity, and judgment still matter,” a LinkedIn spokesperson told Fortune, adding that job postings referencing “storytellers” have doubled over the past year.
