Morgan Stanley forecasts that European banks will lose 200,000 jobs

According to new analysis by investment bank Morgan Stanley (USA), this number is equivalent to about 10% of the workforce at 35 large banks. The staff cuts are expected to affect office administration, risk management and regulatory compliance departments the hardest – where it is said that using algorithms will help process spreadsheets faster and more effectively than humans. According to Morgan Stanley, banks are expecting performance improvements of up to 30%.

Some businesses are starting to streamline their operations. Last November, ABN Amro Bank (Netherlands) announced that it would cut one-fifth of its staff by 2028. Eight months earlier, Slawomir Krupa, CEO of Société Générale (France), warned that “nothing is sacrosanct” in this bank’s campaign to cut high capital costs.

The wave of layoffs is not limited to Europe. Last October, investment bank Goldman Sachs warned employees in the US about staff cuts and a hiring freeze until the end of 2025 in an effort to apply AI in every step, from customer reception to reporting.

However, while many banks are under pressure to save costs thanks to AI, some leaders warn against rushing to integrate this technology. Conor Hillery, co-CEO in charge of Europe, the Middle East and Africa at JPMorgan Chase, said: “In the rush and excitement for AI in the banking industry, we need to be very careful so that people do not lose their understanding of the basics and fundamentals.”

Hillery shared that JPMorgan Chase is trying to strike a balance between using AI to speed up basic tasks and ensuring young employees are still fully trained in core skills such as building cash flow models or calculating P/E (price-to-earnings) ratios. “If we don’t do that, we’re going to create a big problem for ourselves in the future,” Hillery said.