Wall Street Job Losses May Top 200,000 As AI Replaces Roles (yahoo.com) 39
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.
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.
Can AI replace shareholders? (Score:2)
Shouldn't be too hard.
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Given that much of the market is ETFs and regular mutual funds that mostly run by statistics and algorithms that don't even need Augmented Idiocy I'd say the shareholders have been automated.
Re: Can AI replace shareholders? (Score:3)
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Can AI replace shareholders?
Depends. Has anybody ever paid an AI yet? Replacing shareholders is easy, here are the steps:
1) Open a free brokerage account
2) Transfer in some money
3) Issue a buy order for any stock, ETF or mutual fund
Congratulations, as soon as your order completes you have a replaced a shareholder with yourself.
Step 1 is easy for a human, but I don't know if any AI has accomplished it yet. Step 2 is also very easy for a human, but it requires at least a little money. If you have absolutely zero money and no bank accoun
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The likes of the FTSE 100, or other indexes aren't even AI managed - they're really just if...then...else algorithms. They seem to do okay, and they're what a lot of pension funds use.
I'm sure there are some "AI managed" ETFs and the like - no idea if they're better than humans - quite probably, as it seems most investment managers are less good at their job than the index algorithms.
skeptical of AI, but this sounds like a feature (Score:4, Insightful)
So much of what passes for "analysis" is very shallow and just repeats whatever the conventional wisdom is on The Street. Past that, so much of what I hear as 'trading strategies' are algorithmic patterns, so easy to automate.
So let's save all that bonus money, and use it to retrain Wall St bankers/brokers to do something useful... :-)
Re:skeptical of AI, but this sounds like a feature (Score:5, Insightful)
Re:skeptical of AI, but this sounds like a feature (Score:4, Informative)
Index funds almost always outperform the targeted analysis of brokers, at least in the longer term.
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An index fund is basically the opposite of AI.
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The slowness of thinking meat dampens the system response. AI can oscillate at the speed of electrons.
They'll go after HR, IT, support, not those people (Score:2)
So much of what passes for "analysis" is very shallow and just repeats whatever the conventional wisdom is on The Street. Past that, so much of what I hear as 'trading strategies' are algorithmic patterns, so easy to automate.
So let's save all that bonus money, and use it to retrain Wall St bankers/brokers to do something useful... :-)
You know they'll retain the worst. We've seen this before. Bank of America will outsource as much IT to India as it can...but why can't it outsource executives, strategists, and other middlemen who look good, give the right compliments, but no one can really identify what value they provide? 20 years ago, I was working for a major Wall Street bank...they did all they could to replace their software engineers with contractors from India, yet kept building more and more layers of management...executives I k
We'll see (Score:5, Insightful)
Look at programming, or in particular, gaming. The development tools are radically more productive than 30 years ago. But instead of fewer people working on each game, the opposite has occurred. The games just became much, much more complex and graphically sophisticated, and the sizes of the largest dev teams only increased.
Because the future is not about achieving today's standards most efficiently. It's about out-performing the competition. So the biggest determinant of input resources is not some arbitrary goal divided by the level of efficiency - the resources poured into a competition are determined by the size of the prize for winning.
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But we're largely talking about customer support here. How can you do a better job than the competition of telling the customer "Did you turn it off and back on?".
Re:We'll see (Score:5, Interesting)
In a completely different field, designing mechanical systems like HVAC, plumbing, fire protection, etc. I've seen a somewhat similar effect. The productivity tools have gotten more and more sophisticated, but rather than reducing the amount of labor, it has just resulted in more detailed work output expected. Unfortunately, a lot of the extra work, rather than improving the final output, has gone into making up for lack of planning and things like last minute changes (if it's easier to make changes, it's considered OK to require more changes for no additional fee). And the additional detail in the plans produced is often unnecessary and sometimes misleading.
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Yeah what I've seen in the past 10 - 15 years is a large increase in an amount of data collection that is probably pointless and that few people read or care about. And again expectations go way up and last minute changes are demanded. Still waiting for an AI that reduces workload, I think systems will just be simplified instead. But with profit over anything else, who knows.
What's the solution? (Score:2)
Companies don't give a crap about their workforce and are incentivized to work against their interests. If a robot is cheaper than a human they'll pick the robot every time.
Obviously this is unacceptable - people should be more important than machines. So what's the solution, how do we get to a world that's first and foremost for people, and companies exist not just to profit and innovate but to enrich the population?
We're moving in the wrong direction.
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Not a soluble problem? (Score:2)
Innovation occurs because someone is willing to take a risk to implement it. If that someone is Bezos or Dell, the result is a billion dollar corporation... If the someone is a senior corporate executive, they may generate a big gain for their corporation. If the someone is you or me, it's likely to result in some significant improvement to our life, though probably not earth shattering.
Yet in each case the someone needs power and resources to make the innovation. They are taking a risk that it won't fly. U
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Innovation occurs because someone is willing to take a risk to implement it. If that someone is Bezos or Dell, the result is a billion dollar corporation... If the someone is a senior corporate executive, they may generate a big gain for their corporation. If the someone is you or me, it's likely to result in some significant improvement to our life, though probably not earth shattering.
Yet in each case the someone needs power and resources to make the innovation. They are taking a risk that it won't fly. Unless the someone has a major motivation, it's easier to resist the change. Of the three motivations: money, sex and power, money is probably the least problematic. If you break the link from power to innovation to money, you risk encouraging risk averse, innovation denying, behaviour. This would be bad - as the USSR demonstrated elegantly.
Can we max out the power that money gives? Really hard in a society committed to freedom of speech and where only explicit laws stop people doing what they want, as the blessed Elon is currently demonstrating. You're asking the right questions - but I don't see a solution. Please prove me wrong - I'd like to be on this!
I think you've got an interesting perspective, but not a helpful one. The worship of money as the source of all good things is really the root of our issues today. Greed drives *EVERY* aspect of our society, especially in the United States where even healthcare is driven by greed.
While there are some people that can focus on the aggregate of "humanity," for most of us just trying to slug it out and survive the rest of the greed around us, greed becomes a driver for us as well just to make it through the day
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The only economic system that has worked for the mass raising of people from poverty is capitalism. That is a painful observation to idealists, and one that politicians and ideologues of the Left love to pretend isn't true. The only alternative that has worked are Kibbutzim and monasteries, both of which are voluntary and driven by a commitment to another ideal.
People want a 'better life' for themselves and their loved ones. They identify this with having more stuff, which means doing better financially. Th
Solutions: Subsistence, Gifts, UBI, Planning etc. (Score:2)
Solutions collected by me circa 2010: https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fpdfernhout.net%2Fbeyond-... [pdfernhout.net]
"This article explores the issue of a "Jobless Recovery" mainly from a heterodox economic perspective. It emphasizes the implications of ideas by Marshall Brain and others that improvements in robotics, automation, design, and voluntary social networks are fundamentally changing the structure of the economic landscape. It outlines towards the end four major alternatives to mainstream economic practice (a basic income, a gift economy, str
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"The ultra wealthy want lots and lots and lots of people though because their wealth and power drives from us competing with each other for survival."
Hard disagree, elites want a smaller population. They think everything is theirs and don't want people using "their" water and land
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You haven't been paying attention to Davos, obviously.
Re:We're running out of work. (Score:4, Interesting)
That is the really frightening thing.. we have this narrative that we, the general public, are SO important, that the wealthy court us and need us, but we have increasingly been rewarding the kind that don't.
I was alluding to that. (Score:1)
Basically the ultra wealthy are preparing for a world without us.
Ask yourself if the king needed anyone to buy iPhones
May ... (Score:3)
What if it just makes everybody better at their jobs?
they'll replace headcount with sub par performance (Score:3)
they'll replace headcount with sub par performance, and offload the additional work onto remaining staff.... have a chance of seeing some of the initiatives at a major bank to incorporate AI internally... it is not pretty.. and it is not effective... but management doesn't see quality or effectiveness as a metric... just "good enough" and hype are enough for the leadership/stake holders.
It's actually terrifying to see what a finserv/tech is happy to use internally... these are the same people we trust with our money...
"repetitive tasks are at risk" (Score:3)
"Customer services could see changes as bots manage client functions, while know-your-customer duties would also be vulnerable."
I had an online meeting about my portfolio today with a financial advisor who works for a brokerage firm. There was a lot of question/answer interactions as he shared his screen and filled out forms. Eventually he finishes and presses the submit button, some projections and recommendations pop out. I bet he goes through that process 8-10 times a day with various customers. I can definitely imagine that guy being replaced by an AI agent.
All to be later replaced by cheaper labor... (Score:3)
When they find out just how badly all LLMs can go off the rails and how expensive it actually is when all the companies that provide AI models have to make a profit on running them.
Again, organize or be replaced. Employers should be afraid of their employees and all that. In all seriousness, organized labor is the often last thing that can prevent company executives from doing something so bad in the long term that the company's existence is threatened.
Don't buy the idea that unionization is a threat to capitalism; it just threatens the late-stage short term growth over all mindset that only helps a small percentage of people.
"lean to code" (Score:2)
Re: "lean to code" (Score:5, Insightful)
The irony is the people pushing AI technology are saying just that: coding will become everyone's domain. And the efficiency gains projected partly come from the massive increase in ability to automate that natural language "coding" will bring.
The first instinct here is cut costs, which isn't surprising. But longer term I think the implications are unclear. This could simply stabilize economies that otherwise would free fall due to demographic collapse. It's possible this could drive such a complexity increase in produced goods that the human work required increases again. AI could even drive a wave of de-globalization and protectionism that ultimately brings jobs from SE Asia back to the US (something I think we already hear rumblings of).
My company has been in an automation push for about 5 years, and my group has been involved in a fair bit of it. It did allow headcount reduction, but those of us maintaining these systems can see the patchwork of solutions degrading. Ultimately the automation worked best when there were experienced humans with domain knowledge keeping an eye on it and handling edge cases. As those experts attrit and aren't replaced everything is increasingly becoming unstable, but now so much of the work is a black box it's hard to even train new people to manage it. Now we're staring down needing a headcount increase of pretty high dollar technical experts to review and reconstruct these data pipelines, which management of course is balking at. It'll either happen or the division will have a catastrophic failure, is the reality.
I think my personal experience will mirror the future experience of many companies over the next five years. They'll "save" a bunch of money by accruing an absurd technical debt, and ultimately end up either having to pay that debt off with interest or see their buisness fall apart. The successful companies won't cut headcount much, they'll use AI to increase productivity and quality.
Funny money jokes? (Score:2)
That's the angle of humor I was hoping to see on the story. The money is virtual and imaginary so why shouldn't the IRL jobs disappear?
How old do you have to be to remember when share prices were linked to actual corporate assets and past sales? In contrast to now when the prices are machine fantasies mostly based on stuff like future speculations of an acquisition or a fresh niche for a potential monopoly market (as soon as they get the last bug out of the app).