The looming AI "jobapocalypse" — the fear that AI will automate so many jobs it will actually destabilize society — has been on a lot of minds lately. JPMorganChase CEO Jamie Dimon has talked about it. Goldman Sachs CEO David Solomon has talked about it. Even Pope Leo is talking about it.
"There is a legitimate fear of a significant and rapid contraction in available jobs that would create a chain reaction deeply impacting families, young people and local economies," the pontiff wrote in an
The pontiff said there's value in technology that can "relieve humans of arduous, repetitive or dangerous tasks." But that should not come at the expense of people having jobs and the importance of a society geared for people not machines. "The pursuit of greater profits cannot justify choices that systematically sacrifice jobs, because the human person is an end, not a means, and the economic order must remain subordinate to human dignity and the common good," he wrote.
In general, U.S. bank CEOs have been far more circumspect in speaking about AI-related layoffs. Bank leaders tend to say AI won't replace people, it will simply take away their most boring tasks, leaving them to do more interesting work. But even some bank leaders are starting to give voice to the fears that led the pope to issue his letter.
Standard Chartered CEO Bill Winters kicked up a dust storm last week when he addressed the issue. The company
Speaking of the bank's two-and-a-half year effort to build and deploy a new core banking system in Hong Kong that would help the bank use AI, he said the people hired to do that work knew the project and their jobs would end.
"We began reskilling them at the earliest possibility," Winters said. "The people that want to reskill, that want to carry on, we're giving every opportunity to reposition. And the people that say, I've done my bit, I'm ready to do something else, I'll take a package at the end of the migration of the application. So this isn't cost cutting. It's replacing, in some cases, lower value human capital, with the financial capital and the investment capital that we're putting in." Everything else he said was undone by the phrase "lower value human capital," which struck a particular nerve.
Stephen Bell, co-managing partner of Peregrine North, said, "There is no such thing as 'low value human capital.' There are roles which are more likely to be in the early waves of AI disruption. The latter is a statement of fact. The former is insensitive and dismissive."
Leadership consultant Russell Graham wrote, "Can't get around those four words 'lower value human capital.' Whilst the impact of digital transformation is almost always role elimination, showing more empathy for the people involved goes a long way to soften the message."
On Friday, Winters posted a partial apology on LinkedIn for his choice of words. This brought even more backlash. "I've watched leaders apologise for 'choice of words' when the real issue was the choice of thinking," wrote Avi Sharma, CEO of Outseen, in a response to Winter's LinkedIn post. "Sometimes the words aren't the problem, they're just the most honest window into a view that the audience wasn't ready to hear out loud."
Reducing jobs
In the past week, Jamie Dimon at JPMorganChase and David Solomon at Goldman Sachs have acknowledged that AI will likely reduce some positions, while creating opportunities for those with strong AI skills.
"AI is going to change jobs," Dimon said during a Bloomberg interview. "I think it will reduce some of our jobs down the road. I think we'll be hiring more AI people and probably less bankers in certain categories, and it'll make them more productive."
"Goldman Sachs may need fewer people in regulatory reporting or client onboarding, freeing us up to hire more bankers, traders and asset managers who are interacting with clients constantly," CEO Solomon wrote in an opinion piece for the New York Times.
But he also argued that while Goldman Sachs's economists estimate that over the next decade AI may automate 25% of work hours, that does not mean it will kill a quarter of all jobs.
"What's more likely is that people will find more productive ways to spend their time," he said. "When I was a first-year banking analyst, something as simple as making a graph of a stock's performance took six hours of looking up prices in back issues of The Wall Street Journal on microfiche. Today, a first-year analyst can do it in seconds, and we have employed more people than ever in recent years. With more sophisticated tools, the complexity of our work naturally expands. Do any of us feel like we have less to do these days despite the convenience of Excel, email or Zoom?"
Jordan Sternlieb, West Coast banking lead at West Monroe, agreed with this perspective. He helps banks take manual, non-value-added tasks off the plates of salespeople and relationship managers.
"I think AI will really help with that," he said. "Those folks that are client-facing can be armed with a lot more information to better help and serve their clients, so I think some of that administrative stuff will hopefully go away."
But instead of staff reductions, Sternlieb hopes these efficiency gains will lead to banks taking on more clients so that layoffs won't be needed.
Banks are under pressure from their investors to improve their margins and earnings, Sternlieb pointed out.
"Every organization that's savvy is looking at, hey, how can I use AI to improve my business, and it's certainly those that are getting it right, or are providing a point of view on that, that the investor community finds favorable," he said.
To survive, people in client-facing roles need to make sure they're providing valuable help and advice to customers, Sternlieb said. People in operations or in a back office need to upskill themselves on AI.
Jude Melville, CEO of b1BANK, a business bank in Baton Rouge, Louisiana, takes a rosier view of AI's impact on jobs.
"I believe we as a company and we as a country will have more jobs five years from now than we do today, but like most journeys, how quickly we get there is partly dependent on how we frame it from the start," Melville told American Banker. "At b1 we're jumping in, conducting positive experimentation and discussing the possibilities of empowerment through engagement, rather than just getting caught up in a wave. Maybe instead of a job apocalypse the more productive question is how do we make it a jobapalooza?"
Companies have a responsibility to help their employees navigate AI-led shifts, he said. "Companies that help their employees grow and develop do better, particularly banks, who depend not only on their own strength, but on the strengths of the communities of which they are a part, to thrive," he said. "It's one of the three or four most important opportunities we face today and, as such, tackling it is really an obligation."
Public policy effort needed
Both Solomon and Dimon argued that if AI does destroy jobs at high speed, there has to be a broader effort to address the impact on people and society, essentially echoing the points made by Pope Leo.
"Public policy must respond, by funding large-scale reskilling or encouraging AI that supports workers instead of replacing them," Solomon wrote. "This must be a joint effort between the public and private sectors. The public sector should create incentives and provide resources where necessary, including investing more in vocational schools and community colleges; the private sector should help workers upgrade their skills and reimagine on-the-job training."
Similarly, Dimon said, "I see all the backlash on data centers and AI. I do think it's incumbent upon U.S. society to think through — if it happens too fast, what do we do about it? Do the work, get prepared, take care of your people. Take care of society. And I think we'll be ok."
