European banks plan to eliminate 200,000 jobs by 2030 as AI transforms the industry

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

Europe's banking sector is about to get a tough lesson about efficiency. According to a new Morgan Stanley analysis reported by the Financial Times, more than 200,000 European banking jobs could vanish by 2030 as lenders lean into AI and shutter physical branches. That's roughly 10% of the workforce at 35 major banks. The bloodletting will hit hardest in back-office operations, risk management, and compliance, the unglamorous guts of banking where algorithms are believed capable of tearing through spreadsheets faster and more effectively than humans. Banks are salivating over projected efficiency gains of 30%, according to the Morgan Stanley report. The downsizing isn't confined to Europe. Goldman Sachs had warned U.S. employees in October of job cuts and a hiring freeze through the end of 2025 as part of an AI push dubbed "OneGS 3.0" that's targeting everything from client onboarding to regulatory reporting. Some institutions are already swinging the axe. Dutch lender ABN Amro plans to cut a fifth of its staff by 2028, while Société Générale's CEO has declared "nothing is sacred." Still, some European banking leaders are urging caution, with a JPMorgan Chase exec telling the FT that if junior bankers never learn the fundamentals, it could come back to haunt the industry.

Experts warn AI advances could lead to 200,000 banking jobs being cut this year

JPMorgan Chase CEO disagrees - we need entry-level jobs for long-term success AI-induced tech layoffs are already widely reported, but a new Morgan Stanley report (via the Financial Times) suggests banking could be the next industry to be hit with widespread redundancies. The report claims as many as 200,000 European banking jobs are forecast to be at risk by 2030 as a result of AI, equating to around 10% of Europe's finance workforce across 35 major banks. Job cuts are mostly expected to hit back- and middle-office roles, including risk management and compliance, where AI can deliver around 30% efficiency gains. Banks have already been criticized for closing physical locations in recent years to cut costs, with over 6,000 closures in the UK since 2015, but their models are being challenged once more as artificial intelligence threatens many of the remaining human workers. Already, we've seen some of the effects of AI on the banking workforce, with ABN Amro, Société Générale and Goldman Sachs all warning of potential job cuts or hiring freezes. However, JPMorgan Chase CEO Jamie Dimon warned of the opposite - removing junior roles could undermine future skills and training, therefore while such a move could prove successful in the short term, it could lead to long-term failures. This could also lead to career ladder disruptions, where a lack of entry-level roles make the sector inaccessible to newly-qualified workers. Dimon even suggested that AI could hold the key to unlocking shorter working weeks and better work-life balance for employees. AI's effects have been largely delayed on the industry given its heavily regulated nature, but with a growing number of compliant AI tools hitting the shelves, the same effects we've seen on tech and retail workers could be mirrored in banking next.

AI Can Reportedly Take Away More Than 2 Lakh Banking Jobs by 2030

Dutch bank ABN Amro plans to let go of a fifth of its total staff by 2028 Artificial intelligence (AI) was reportedly cited as the primary reason behind European banks eliminating more than 2,00,000 jobs by 2030. As per the report, a Morgan Stanley analysis claims that European lenders, which includes region's 35 large banks, could eliminate 10 percent of total roles in the next five years, bringing a massive wave of layoffs. After the COVID-10 pandemic, layoffs have plagued the tech industry, but if the predictions are true, the next industry to see job cuts could be banking. European Banking Sector Could See Massive Layoffs According to a Financial Times report, analysts from Morgan Stanley have predicted that widespread AI adoption and reductions in physical branch could lead to reduced staffing needs in Europe over the next five years. Banks are said to be exploring the gains in operational efficiency that AI systems can deliver. With 10 percent of the total 2.1 million jobs, or nearly 2,12,000 roles at risk, the publication claims that the biggest layoffs will be seen in back-office operations, risk management, and compliance. These roles are reportedly seen as repetitive or data-intensive, and are said to be the prime candidates for automation using machine learning and AI tools. Some of these tasks include monitoring transactions, preparing reports and processing large datasets. Algorithms can execute these functions faster than traditional manual processes, a factor driving banks' interest in technology-led restructuring. Several European banks have reportedly already outlined their plans for staff reduction. Dutch bank ABN Amro has reportedly announced plans to eliminate around 20 percent, or one-fifth, of its total workforce by 2028, citing ongoing digitisation and organisational stratification as reasons. French lender Société Générale has reportedly also indicated that no segment of its operations is exempt from scrutiny as the institution seeks to align its cost base with competitive pressures. Jason Napier, Head of European banks research at UBS, told FT, "We can already see industry changes in audit, law and consulting, but banks aren't delivering improved efficiency yet. Those who still need convincing that AI will significantly change financial services should spend more time exploring the tools which are already available." The trend is not confined to Europe. In the US, Goldman Sachs reportedly told employees in October 2025 that it would undertake job cuts and implement a hiring freeze through the end of the year as part of an AI-driven strategy known as OneGS 3.0. That initiative covers operational areas from client onboarding to regulatory reporting, signalling that financial institutions globally are exploring similar efficiency strategies.

200,000 bank job cuts: After tech industry shake-up, Morgan Stanley issues major warning as AI targets another major sector

After the tech industry, another sector banking is at the risk of losing lakhs of jobs due to digitalisation and AI. According to a Morgan Stanley report, more than 200,000 European banking jobs could vanish in the coming five years due to the impact of AI. The biggest layoffs will be seen in back-office operations, risk management, and compliance. In 2025, the tech industry had a year marked by disruption induced by artificial intelligence (AI) and layoffs. After the COVID-10 pandemic, layoffs have hit the tech industry the most, but if the predictions are true, the next industry to see job cuts could be banking. Now, Morgan Stanley has issued an AI job warning for the banking sector and has forecast that over 200,000 European banking jobs could be lost in the next five years due to accelerated AI adoption and branch closures, reports Financial Times. The report states that more than 200,000 European banking jobs are under threat over the next five years as lenders increasingly embrace artificial intelligence and close more branches, analysts have estimated. Morgan Stanley has forecasted that European banks could cut 10 percent of the jobs by 2030. The report further highlights that these job cuts will be driven by efficiency gains from digitalisation and AI. The analysis done covers around 35 European lenders which employ around 2.12 million staff. Morgan Stanley reports that as many as 2,00,000 European banking jobs could disappear in the next five years. The job cuts in the banking sector are most likely to come from within banks' "central services" divisions, which include back- and middle-office roles, as well as risk management and compliance positions. These roles are reportedly seen as repetitive or data-intensive, and are said to be the prime candidates for automation using machine learning and AI tools. Some of these tasks include monitoring transactions, preparing reports and processing large datasets. Algorithms can execute these functions faster than traditional manual processes, a factor driving banks' interest in technology-led restructuring. ALSO READ: BofA CEO says he hired 2,000 recent Gen Z grads from 2,00,000 applications; Brian Moynihan says 'my advice to those kids...' "Many banks have quoted efficiency gains coming from AI and further digitalisation to the tune of 30 per cent," Morgan Stanley noted. Europe's lenders have come under intense pressure from investors to find new ways to cut costs and boost returns on equity that persistently lag behind their US rivals. Banks have already started to cite AI as a catalyst for restructuring their operations. In November, Dutch lender ABN Amro announced plans to cut around one-fifth of its full-time workforce by 2028, while Société Générale chief executive Slawomir Krupa warned in March that "nothing is sacred" in his drive to rein in the French bank's persistently high cost base. According to analysts at Morgan Stanley, artificial intelligence offers banks a fresh opportunity to improve cost-to-income ratios -- a key efficiency metric closely watched by investors -- as traditional cost-cutting measures have largely run out of momentum. The forecast highlights how accelerating digitalisation and wider adoption of AI could significantly reshape Europe's banking sector in the coming years, particularly among consumer-focused lenders and in countries such as France and Germany, where cost-to-income ratios remain elevated. ALSO READ: Aravind Srinivas issues stark warning: Multi-billion data centers may soon become obsolete, Perplexity CEO flags 'biggest threat' UBS analysts echoed the view that AI could transform European banking. The Swiss bank has already begun using the technology to create analyst avatars, sending videos of simulated bankers to clients. Jason Napier, head of European banks research at UBS, said efficiency gains are already visible in sectors such as audit, law and consulting, but banks have yet to fully realise similar benefits. "Cost bases remain large, and these powerful new tools are still not fully implemented," Napier said, adding that sceptics should spend more time exploring AI tools that are already available. As part of its push, UBS recently sent its 250 most senior leaders to Oxford University for an AI-focused leadership summit, according to people familiar with the matter. However, even as banks face growing pressure to extract savings from AI, some senior executives have urged caution. Conor Hillery, JPMorgan Chase's co-chief executive for Europe, the Middle East and Africa, warned against losing sight of core banking fundamentals amid the rush to adopt AI. He said JPMorgan was seeking a balance between using AI to speed up routine tasks and ensuring junior staff continue to develop essential skills such as building cash-flow models and analysing price-to-earnings ratios. "Otherwise, we're storing up a big problem for the future," Hillery said. ALSO READ: Big revelation on comet 3I/ATLAS leaves scientists stunned: Interstellar object could be 14 billion years old, older than our Sun? What we know

Morgan Stanley predicts over 200,000 European banking jobs will be cut by 2030 - FT

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. The Financial Times reports that as financial institutions pursue the benefits promised by AI, close bank branches and push more of their operations online through digital transformation, banking jobs across Europe are under threat. Morgan Stanley analysis of 35 lenders reveals that cuts will likely come from 'central services' divisions such as back- and middle-office roles, as well as risk management and compliance positions. While European lenders struggle to meet investor demands, cut costs and boost returns, Morgan Stanley research finds that banks attribute up to 30% in efficiency gains from AI and digitalisation. AI continues to be referenced as a reason to restructure operations and an opportunity to improve cost-to-income ratios. The Morgan Stanley forecast highlights that greater digitalisation and adoption of AI would overhaul the European banking ecosystem over the next four years, particularly across consumer-focused lenders and in countries such as France and Germany where banks' cost-to-income ratios remain high. As a result, the expansion of AI adoption and accompanying fears of widespread job losses persist, resulting in predictions - like Morgan Stanley's - where hundreds of thousands of jobs are expected to be lost. This sentiment was echoed by Bank of England governor Andrew Bailey who recently agreed that AI will likely displace people from jobs but would not cause mass unemployment. Bloomberg Intelligence also predicted in January 2025 that global banks will cut as many as 200,000 jobs in the next three to five years. The accelerating push toward AI‑driven efficiency leaves Europe's banks facing a clear trade‑off: meet investor demands for lower costs, or grapple with the societal impact of widespread staff reductions. As back‑ and middle‑office roles come under pressure, the industry must confront whether it can modernise at the pace it wants without triggering deeper concerns about workforce stability. At the same time, the scale of predicted job losses raises questions about operational resilience. Cutting too deeply into risk, compliance, and support functions could expose banks to new vulnerabilities just as digital transformation ramps up. The challenge now is whether European lenders can pursue AI‑enabled efficiency while maintaining the expertise and trust that underpin the sector.