The lessons Chime and Visa's layoffs have for banks

• Key insight: Chime and Visa have both indirectly tied AI to job cuts in recent announcements.
• Expert quote: "AI is changing what's possible but requires new skills," —Chime CEO and co-founder Chris Britt
• Forward look: The ability of consumers to use their own AI tools to access banking services will make some development work unnecessary. 

Mentioning "artificial intelligence" in a job cut announcement is becoming more common, but in reality the technology is still not overtly replacing people with machines. What AI is changing is how customers access bank features, and the internal talent needed to accommodate that. 

For example, Friday's Chime downsizing acknowledged AI's role but did not say the technology was performing specific jobs. The digital lender laid off about 150 workers, or 10% of its staff, the downsizing coming at a time when AI investment is sparking fears about job security.  

 "AI is changing what's possible but requires new skills," Chime CEO and co-founder Chris Britt said in a memo to employees that the company emailed to American Banker. "And as a public company, we must accelerate growth while continuing to demonstrate operating discipline to build an even stronger, more profitable business."

Adding while subtracting

Chime has maintained a busy product development schedule as it cuts jobs. The digital bank recently added investing to its app. Chime hit GAAP profitability earlier this year, and has expanded products to reach its target audience of consumers that Chime says traditional banks do not serve. 

"We're at an important moment in Chime's journey. In the past year alone, we've launched Chime Card, Chime Prime, Chime Invest and Jade. To continue to lead in the next era, we need to have the right structure, capabilities, and approach to our work," Britt said. This strategy, and the growth of AI as a development tool, has led Chime to restructure and add speed to how it builds and sells these products. "Today we're making changes across the company to organize for this next chapter. In some areas, that means a flatter structure and smaller squads. In others, it means building new capabilities," Britt said.

Chime's announcement is similar to a move Visa made earlier in the week. Visa announced job cuts, citing AI as a partial but not sole contributor. And like Chime, Visa said it's moving to smaller teams to develop more products faster. "Smaller teams with fewer layers are moving faster than ever and getting more done," Britt said.

What is getting cut?

Chime and Visa followed other financial firms that have linked AI to downsizing. Block earlier this year laid off about 40% of its employees, with CEO Jack Dorsey saying AI has fundamentally changed work, and predicted most companies will eventually make similar moves. At the time, analysts said Block had overhired and was using AI as a reason to reduce its workforce. 

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"While it's increasingly common for tech companies to cite AI efficiency, that narrative often serves as a cover for addressing bloated overhead and over-hiring from past high-growth phases," Eric Grover, principal at Intrepid Ventures, told American Banker. Grover noted Chime cut 12% of its workforce in 2022 following expansion during the rush to digital commerce during the Covid-19 pandemic. "Moreover, management noted that this reduction was tied to flattening management layers," Grover said. But while AI can be a blanket reason to trim payroll, there's a more subtle use of AI that is making internal development work less necessary. 

"The biggest efficiencies for banks will come from 'bring your own AI' (BYOAI), where consumers use their personal LLMs to replace cumbersome menu-driven interfaces with conversational AI," Richard Crone, a payments consultant, told American Banker. 

The computing cost of the user experience is being delegated back to the consumer, according to Crone, similar to how banks didn't buy customers smartphones or data plans to support mobile banking. BYOAI forces the consumer's preferred LLM to handle the massive compute costs of conversational intent, reasoning and navigation.

"Legacy cores and digital banking platforms cannot out-compute or out-spend the AI hyperscalers," Crone said. "Instead of trying to build proprietary chatbots or match Big Tech's R&D, smart institutions are realizing they can simply out-govern them by letting the consumer's AI handle the interface while the bank remains the secure system of record."

The greatest value of BYOAI is capturing intent before the transaction, according to Crone. A legacy bank app only sees a payment execution, but a consumer's LLM sees the life events, goals and deliberations that caused it. 

"Banks that open the door to the consumer's own LLM through a Secure Verification Gateway will gain hyper-personalization for free," Crone said. "Robinhood and Coinbase just proved this model works in production. By integrating Model Context Protocol (MCP) servers, they allowed external agents to execute trades and agentic payments without rewriting their entire backend codebases, a devastating efficiency that eliminates the need for armies of traditional UI/UX developers."