HSBC Considers Significant Job Cuts Amid AI Integration
HSBC has a long history of substantial workforce reductions. Back in 2015, then-CEO Stuart Gulliver committed to slashing 50,000 positions from the bank’s 266,000-strong workforce by shutting down various operations and shifting focus towards Asia.
In early 2020, his successor, Noel Quinn, unveiled a plan to eliminate an additional 35,000 jobs by streamlining the bank’s hierarchical framework and continuing the Asian pivot.
Most recently, Georges Elhedery, who succeeded Quinn, disclosed intentions to dissolve HSBC’s equity capital markets (ECM) and mergers and acquisitions (M&A) divisions in Europe and the United States, redirecting focus towards Asia and the Middle East.
Notwithstanding these strategies, HSBC’s headcount at the conclusion of the previous year stood at 210,000. In the absence of Elhedery’s initiatives, the figure would likely have approached 181,000 or lower.
The bank may harness the power of artificial intelligence (AI) to expedite this transformative agenda.
According to a Bloomberg report today, under Elhedery’s aegis, HSBC aims to reduce approximately 20,000 jobs over the next three to five years by automating middle and back-office functions with AI and possibly exiting certain business segments.
Specific roles earmarked for automation remain undisclosed, but there is speculation that “non-client-facing roles in global service centers” could be involved, typically encompassing operations, compliance, finance, and IT positions situated away from major financial centers.
During a speech yesterday at the Morgan Stanley Financial Conference prior to Bloomberg’s report, HSBC CFO Manveen Kaur revealed that the bank has been leveraging AI for undertaking Know Your Customer (KYC) onboarding, small-ticket credit lending, transaction monitoring, and other “volume-driven activities” which necessitate “basic binary decision-making.”
Kaur characterized HSBC’s initiatives involving AI as not merely a “severance story,” asserting instead that the institution would focus on “upskilling colleagues” while “achieving more with the same workforce.”
However, Bloomberg suggests that the reality might be divergent. As of now, HSBC has declined to provide a comment.
While HSBC prepares for potential upheaval, it may not be an isolated case. Insider reports from Goldman Sachs and Citi allude to comparable strategies in the pipeline.
At Goldman Sachs, an October memo from CEO David Solomon outlined plans to institute a new AI-driven “operating system” known as “OneGS 3.0.”
In January, Solomon expressed enthusiasm about this initiative, highlighting that Goldman had already commenced explorations into “six work streams,” aimed at fundamentally reengineering processes.
Although these work streams were not detailed, Solomon promised further information “over the course of the next quarters.”
Off the record, a Goldman Sachs insider indicated that announcements could transpire as early as April. Reports suggest that another wave of job cuts is imminent, targeting underperforming employees, as the firm tightens performance standards in response to AI advancements.
A representative for Goldman Sachs refrained from commenting on speculation but stated, “As always, Goldman Sachs is focused on supporting our people through our talent management, development, and engagement efforts.”
Meanwhile, vibrations of potential changes echo at Citi as well. Although the bank implemented a modest number of job cuts in January, whispers of a more extensive reduction have surfaced.
Positions in compliance, risk management, controls, and data are anticipated to take the brunt of forthcoming layoffs.
Following a 2020 consent order, Citi had expanded its workforce in these domains. CEO Jane Fraser noted in January that the associated transformation work is nearing completion and that AI is now utilized for “over 50 processes.”
A representative for Citi remarked, As we previously indicated, we will continue to reduce our headcount in 2026.
These adjustments align our staffing levels, locations, and expertise with current business requirements; efficiencies gained through technology; and progress towards Citi’s Target State transformation.
As AI’s influence deepens, some roles may face more severe redundancies than others. Positions within relationship-focused front office roles could potentially remain insulated.
In December, David Solomon from Goldman Sachs even suggested that the savings from process-driven roles could be reinvested into hiring new bankers to enhance client interaction. It remains to be seen what the future holds for these developments.
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