Goldman president says bank is 'human assembly line' facing automation

Goldman Sachs' use of artificial intelligence is helping the bank scale up without requiring much more hiring, according to President and Chief Operating Officer John Waldron.

"I often describe Goldman Sachs as a human assembly line," Waldron said in an interview on CNBC Tuesday. "If you think about what's happened in manufacturing, it's become much more robotic, it's become much more automated. The banks really haven't been on that journey to the same extent."

Back-office roles are increasingly being handled by machines at Goldman Sachs and across Wall Street, where executives are pointing to additional areas where AI can find efficiency and drive growth. That's leading to questions about potential job losses.

"Our human assembly lines will become more digitized, digital agents will be our robots," Waldron said. "I'm not sure dynamically how the overall headcount will change, but I think the firm is going to get much more resilient and much more scalable."

The executive — who's widely seen as the front-runner to succeed David Solomon as chief executive officer — launched a strategy for the bank, known as "OneGS 3.0," to implement efficiency savings generated by AI. Areas to benefit from those savings include client on-boarding, lending processes, regulatory reporting and vendor management, the bank said at the time.

At the bank's RIA Professional Investor Forum on Tuesday, Waldron told attendees that the bank measured the success of its AI deployment through measuring productivity gains, costs savings and forgone investments.

Waldron said it's still unclear how AI will change the structure of Goldman's organization. Some industry observers have suggested the technology could help trim headcount at junior levels, helping narrow the base of the traditional corporate pyramid.

"We don't know yet whether it's a diamond or a pyramid," Waldron said.

In regard to the rest of the economy, Waldron said many reported layoffs are not yet due to generative AI deployment, but rather firms catching up on "hoarding of employees" in the wake of the Covid-19 pandemic. He predicted that savings from generative AI could start to impact organizations' structures more broadly in 2027 and 2028.

— With assistance from Isabelle Lee