Major Wall Street institutions are crediting AI with enabling significant workforce reductions even as quarterly earnings soar.
The New York Times reports that the six largest Wall Street banks collectively eliminated 15,000 positions during the first quarter while posting combined profits of $47 billion, representing an 18 percent increase over the previous year. The institutions — JPMorgan Chase, Citi, Bank of America, Goldman Sachs, Morgan Stanley, and Wells Fargo — are attributing these workforce reductions in part to AI implementation across various banking operations.
The changing narrative around AI’s impact on employment became particularly evident in recent statements from Bank of America chief executive Brian T. Moynihan. Less than four months after assuring the bank’s 210,000 employees in a television interview that AI posed no threat to their jobs, Moynihan announced the bank had shed 1,000 positions through attrition by “eliminating work and applying technology,” specifically identifying AI as the driving force.
“A.I. gives us places to go we haven’t gone,” Moynihan said following Bank of America’s announcement of $8.6 billion in first-quarter profit, which exceeded the same period last year by $1.6 billion.
The applications of AI in banking span from back-office operations to front-office professional work. Banks are deploying the technology to automate paperwork compliance, account opening approvals, invoice generation, legal document review, and organization of sensitive customer data. These functions previously required tens of thousands of employees across various skill levels and salary ranges.
Citi has committed to reducing its workforce by 20,000 employees through what executives describe as a “productivity and efficiency journey.” The bank utilizes AI software from Anthropic, Google, Microsoft, and OpenAI for tasks including automatically reading legal documents, approving account openings, sending trade invoices, and organizing customer data. Recent layoffs at Citi affected employees in San Antonio, Tucson, Tampa, and other lower-cost cities where banks have relocated staff in recent years, not just traditional Eastern financial hubs.
Among those cut were scores of employees participating in Citi’s “A.I. Champions and Accelerators” program, where workers performed their regular duties while promoting AI technology adoption among colleagues.
Wells Fargo has implemented AI software that generates instant creditworthiness assessments for potential borrowers, creates merger deal pitchbooks, and handles customer service calls from credit card holders through rerouting or automated responses. The bank has reduced headcount each quarter over the past year.
Wells Fargo chief executive Charlie Scharf has been notably direct about the technology’s employment impact. “These are all opportunities to do things much, much more efficiently with A.I. than humans have been doing,” Scharf said in December, adding that most bank leaders “are afraid to say it because no one wants to stand up and say that we are going to have lower head count in the future.”
“It’s a difficult thing to say,” he added.
The job losses extend beyond highly compensated professionals in financial centers. While Wall Street distributed $49.2 billion in bonuses last year according to New York State data, the reductions affect corporate employees across the country in various roles and compensation levels.
Some optimism remains in certain quarters. Morgan Stanley executives have publicly stated they will not replace jobs with AI. The head of the bank’s wealth management division compared an AI investment suggestion tool to “J.A.R.V.I.S., from ‘Iron Man,’ but for managing money,” referencing the fictional assistant from the superhero films.
However, concerns about AI’s broader impact on the banking industry persist. Steven Alexopoulos, a longtime banking analyst, produced a 102-page research report in January for TD Bank predicting AI would initially create a “profit surge” for banks, followed by a “fortune reversal period.” He forecast that customers would use the technology to find better interest rates and cheaper loans, reducing bank profitability and ultimately leading to mass layoffs and closures.
This month, Alexopoulos left TD Bank and has not been replaced, according to a colleague. In a LinkedIn post, he announced a career shift after more than 25 years as a bank analyst, stating he would now focus on researching AI.
The instant bestseller Code Red: The Left, the Right, China, and the Race to Control AI, written by Breitbart News social media director Wynton Hall, serves as a blueprint for conservatives to control the impact of AI on the economy and create positive opportunities for Americans, rather than embrace Silicon Valley’s approach of transforming our society into one that relies on welfare payments in the form of “universal basic income.”
Senator Marsha Blackburn (R-TN), who was named one of TIME’s 100 Most Influential People in AI, praised Code Red as a “must-read.” She added: “Few understand our conservative fight against Big Tech as Hall does,” making him “uniquely qualified to examine how we can best utilize AI’s enormous potential, while ensuring it does not exploit kids, creators, and conservatives.” Award-winning investigative journalist and Public founder Michael Shellenberger calls Code Red “illuminating,” ”alarming,” and describes the book as “an essential conversation-starter for those hoping to subvert Big Tech’s autocratic plans before it’s too late.”
Read more at the New York Times here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.
