HSBC's 20,000 potential AI job cuts could be duplicated at Goldman Sachs & Citi

HSBC is not unfamiliar with the concept of cutting tens of thousands of jobs. In 2015, then-CEO Stuart Gulliver promised to cut 50,000 of the bank's 266,000 workforce by closing some operations and pivoting to Asia. In early 2020, Noel Quinn, Gulliver's successor, produced another plan to cut 35,000 jobs by simplifying the bank's management "matrix" and further pivoting to Asia. And then last January, Georges Elhedery, Quinn's bold successor, announced a plan to close the bank's equity capital markets (ECM) and M&A businesses in both Europe and the US, and to focus more intently on Asia, plus the Middle East.

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Despite all this, HSBC's headcount at the end of last year stood at 210,000 people. Even without Elhedery's efforts, it should now be 181,000 or below. 

AI may help the bank to make the final push.

Bloomberg reported today that under Elhedery, HSBC is hoping to cut 20,000 jobs in the next three to five years by automating jobs in the middle and back office using AI, and maybe also exiting some more businesses. It's not clear exactly which jobs would be automated, but the favourites are reportedly "non-client facing roles in global service centers," which usually means operations, compliance, finance, and IT roles away from major financial hubs. 

Speaking yesterday before Bloomberg published its revelations at the Morgan Stanley Financial Conference, HSBC CFO Manveen Kaur, said HSBC has been using AI at its Hang Seng subsidiary for KYC onboarding, small ticket credit lending, transaction monitoring, and other "volume-driven activities" that require "very basic binary decision-making."

HSBC's endeavours with AI at Heng Seng are not a "severance story," said Kaur. Instead the bank will be "upskilling colleagues" and "doing more with the same number of people," she explained. 

For the bank as a whole, Bloomberg suggests this may not be so. HSBC didn't respond to a request to comment.

While HSBC's binary decision makers brace for pain, they may not be alone. Off the record, insiders at Goldman Sachs and Citi suggest that similar intentions are in the works there.

At Goldman Sachs, a memo from CEO David Solomon in October last year described plans to introduce a new AI driven "operating system" for the bank titled "OneGS 3.0." In January, Solomon said he was "excited" about this effort and that Goldman had already begun looking at "six work streams," where it will "invest to reengineer these processes from the ground up." Solomon didn't say what these six work streams are, but he promised news "over the course of the next quarters."

Speaking off the record, one Goldman Sachs insider says this news could come as soon as April. The firm is allegdly planning to make another round of job cuts focused on underperformers and has tightened its performance criteria in light of AI. There are suggestions this will just the start. A spokesman for Goldman Sachs said: “As always, Goldman Sachs is focused on supporting our people through our talent management, development and engagement efforts. We do not comment on speculation or rumors.”

While there are rumblings at Goldman Sachs, there are rumblings at Citi too. The US bank announced a small number of job cuts in January, but there are suggestions that a considerably larger round may be coming. Roles across compliance, risk, controls, and data are likely to bear the brunt of future cuts. Citi added thousands of jobs in this areas as a result of its 2020 consent order. Citi CEO Jane Fraser said in January that resulting transformation work is nearly done. AI is now being used by the bank for "over 50 processes," added Fraser.

A spokesperson for Citi said: “As we said previously, we will continue to reduce our headcount in 2026. These changes reflect adjustments we’re making to ensure our staffing levels, locations and expertise align with current business needs; efficiencies we have gained through technology; and progress against our Transformation work, which is nearing Citi’s Target State. We are grateful for the contributions these colleagues have made to Citi.”

As AI bites, some roles are likely to be savaged more comprehensively than others. Relationship-focused front office jobs could be comparatively immune. In December, David Solomon at Goldman Sachs even suggested that the firm might reinvest the money it saves from process-roles in new bankers to talk to clients. Humans can but hope.

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