HSBC and Standard Chartered Respond to AI Job Cuts and Workforce Changes
Banking Giants Address Workforce Concerns Amid AI Advancements
By Lawrence White and Selena Li
HSBC’s Approach to AI Integration
LONDON/HONG KONG, May 20 (Reuters) – HSBC appealed to staff not to fight AI on Wednesday, saying it would destroy jobs while creating new ones, as banking rival Standard Chartered sought to calm workers over comments that the technology would replace “lower-value human capital”.
The predictions from two of the world’s biggest banks are the clearest sign yet about the upheaval from a technology that can consume and process vast swathes of data, completing tasks previously done by people.
CEO Georges Elhedery’s Message to Staff
CEO Georges Elhedery urged HSBC staff to make sure they were “not fighting us, not disenfranchised, not anxious, overwhelmed, and resisting the change,” pledging that AI could make them “more productive versions of themselves”.
“We all know generative AI will destroy certain jobs and will create new jobs,” Elhedery said.
Standard Chartered’s Workforce Restructuring
Standard Chartered said on Tuesday it would eliminate almost 8,000 jobs as it replaced what its CEO called “lower-value human capital” with technology.
Job Cuts and Vulnerable Roles
Bill Winters said StanChart would cut 15% of its corporate function roles by 2030, highlighting how staff in so-called back office roles are particularly vulnerable.
HSBC employs more than 211,000 people, while StanChart has roughly 83,000 employees.
Managing Employee Concerns
Underscoring the sensitivity of the issue, Winters sought to limit the fallout in a memo on Wednesday, saying staff were valued and any changes would be handled with “thought and care”.
Industry-Wide Impact of AI on Employment
Findings from Morgan Stanley Analysts
Morgan Stanley analysts found that companies in banking, technology and professional services had shed one in 20 staff in the past year as a result of using AI.
Offshore workers, on which financial services firms rely to run many of their IT services at locations including India or Poland, and young, new workers are bearing the brunt, Morgan Stanley’s report said.
Reluctance to Disclose Job Losses
Banks have been reluctant to publicly discuss the scale of job losses, although this is gradually changing.
Goldman Sachs told staff in October of potential job cuts and a hiring slowdown, an internal memo seen by Reuters showed, as the Wall Street giant embraced AI.
Wells Fargo CEO Charlie Scharf said in December it has not reduced the number of people it employs as a result of AI, but was “getting a lot more done” because of the technology.
Risks and Reactions to AI-Driven Job Cuts
AI-Fuelled Job Cull Risks Backlash
AI-FUELLED JOB CULL RISKS BACKLASH
As banks become more up front about how AI could replace routine jobs, fears are growing over the scale of disruption.
Potential for Employee Resistance
Using AI to cut jobs risks a backlash, the CEO of Norway’s $2.2 trillion sovereign wealth fund said in April as staff resist adopting it in order not to make themselves redundant.
StanChart’s Winters said staff who want to retrain will be given the chance to do so.
Academics have warned that staff could be alienated.
Expert Opinions and Public Sentiment
“One should be cautious not to lay off too many staff, because the point in time may come sooner than you think where the productivity potential of AI is realised, and you want these people,” said Fabian Braesemann at the Oxford Internet Institute.
In Britain, six in 10 people think AI will eliminate more jobs than it creates and one in five believe it will create civil unrest, research from the Institute for Artificial Intelligence at King’s College London found.
(Reporting by Lawrence White in London and Selena Li in Hong Kong, additional reporting by Saeed Azhar and Tatiana Bautzer in New York. Editing by John O’Donnell and Alexander Smith)