- Major banks like JPMorgan Chase and Goldman Sachs are restructuring their operations around generative AI, a technology that enables large-scale automation in knowledge work.
- Although Wall Street is enjoying a booming profit year with billions of dollars in revenue from trading and investment, these banks are sharply reducing the pace of hiring.
- JPMorgan reported a 12% increase in Q3 profit year-over-year, reaching $14.4 billion, but its headcount only grew by 1%, reaching 318,153 people.
- CFO Jeremy Barnum stated that management was instructed to “severely restrict new hiring” as the bank deploys AI across its entire system.
- CEO Jamie Dimon acknowledged that AI will eliminate some positions but committed to retraining affected employees and potentially increasing the overall workforce in the long run.
- Goldman Sachs also announced its “AI vision” as CEO David Solomon called for “increasing the speed and agility across all operations.”
- Despite a 37% increase in quarterly profit to $4.1 billion, Goldman will “restrain headcount growth” and proceed with limited layoffs.
- Goldman’s multi-year AI project focuses on improving customer experience, efficiency, and profitability.
- US banks are following a similar path to Amazon and Microsoft, warning about the exposure of their workforce to AI’s impact.
- JPMorgan expects to cut at least 10% of its operations and support staff over the next 5 years due to AI, even as the volume of work increases.
📌 The AI boom is reshaping the US financial sector: JPMorgan and Goldman are both choosing to reduce hiring despite quarterly profits reaching $14.4 billion and $4.1 billion respectively. The focus is on applying AI to boost efficiency, reduce personnel costs, and fundamentally re-engineer the operating model, marking a turning point in AI transformation within the banking industry.
