European banks plan to cut 200,000 jobs as AI takes hold

Europe’s banking sector is about to get a tough lesson in efficiency. According to a new analysis from Morgan Stanley reported According to the Financial Times, more than 200,000 jobs in Europe’s banking sector could disappear by 2030 as lenders turn to AI and close their physical branches. This represents around 10% of the workforce of 35 major banks.

This bloodletting will hit hardest in back-office operations, risk management and compliance, the unglamorous underbelly of banking where algorithms are supposed to be able to sift through spreadsheets faster and more efficiently than humans. Banks are salivating over projected efficiency gains of 30%, according to the Morgan Stanley report.

Downsizing is not limited to Europe. Goldman Sachs warned U.S. employees in October of job cuts and hiring freezes through the end of 2025 as part of an AI initiative dubbed “OneGS 3.0” that targets everything from client onboarding to regulatory reporting.

Some institutions are already striking with an ax. Dutch bank ABN Amro plans to cut a fifth of its workforce by 2028, while the CEO of Société Générale has said “nothing is sacred”. Still, some leaders in Europe’s banking industry are urging caution, with one JPMorgan Chase executive telling the FT that if young bankers never learn the fundamentals, it could come back to haunt the sector.