Jamie Dimon reveals AI eliminated 30-40% of jobs in some JPMorgan divisions during earnings call

Dimon says AI already eliminated 30 to 40 percent of jobs in some JPMorgan divisions

Dimon says AI cut 30 to 40 percent of jobs in some JPMorgan units but competitive dynamics mean margins will not grow as a result. JPMorgan Chase has cut jobs by as much as 40 percent in some parts of the bank using artificial intelligence, CEO Jamie Dimon told analysts during the company's second-quarter earnings call on Tuesday. But investors hoping the technology will dramatically improve profit margins are likely to be disappointed. Dimon said that in a competitive market, every bank will deploy AI to serve customers better, and no single institution gets to pocket the savings. "You don't uniquely benefit from AI," Dimon said after an analyst asked when the technology would slow the growth of JPMorgan's expenses. "If that were true, our margins would be 80 percent today because of computerisation over the last 20 years." When pressed on whether AI would create a leaner bank over time, Dimon acknowledged that the technology would deliver huge efficiency gains and some job cuts, but said most affected employees had been offered positions elsewhere within the firm. The comments came on the same day that Wall Street's largest banks collectively shed 15,000 jobs in a single quarter earlier this year while posting record profits. JPMorgan itself reported net income of more than $21 billion for the second quarter, up 41 percent from a year ago, boosted significantly by a multibillion-dollar gain on an investment in Visa. Every business line posted record revenue, and investment banking fees rose 30 percent year over year to their highest level since 2021. JPMorgan's nearly $20 billion technology budget already supports almost 1,000 AI use cases spanning fraud protection, marketing, and note-taking. In May, Dimon said the bank would probably hire fewer bankers and more AI specialists going forward. The bank has poached senior AI talent from rivals including Nomura, and 150,000 of its more than 300,000 employees already use an internal large language model each week. Chief Financial Officer Jeremy Barnum flagged a new line item that could grow quickly: token spending. Barnum said the cost of running AI models is currently trivial and will remain so through the end of 2026, but the bank is forecasting meaningful acceleration in the second half of the year. The question of token costs will become increasingly important, he said, as JPMorgan thinks about using the right models for the right purpose. The earnings call crystallised a paradox that is spreading across Wall Street. AI is eliminating roles and generating measurable savings, but the competitive dynamics of banking mean those gains flow to customers rather than inflating operating margins. For the employees in the units where headcount fell by 30 or 40 percent, the distinction is academic.

Jamie Dimon says JPMorgan has slashed 40% of jobs in some departments, thanks to AI

JPMorgan Chase CEO Jamie Dimon has repeatedly suggested that AI adoption would not drive widespread layoffs at the bank. But on Tuesday, he disclosed that JPMorgan had made significant cuts to a number of departments due to AI. Dimon shared the changes during the company's latest earnings call, in response to a question about whether AI could make companies like JPMorgan leaner, which referenced fintech company Block's controversial decision to slash headcount. "We fully expect it'll have huge efficiency in certain parts of the company," Dimon said. He added that AI-related productivity gains had already led JPMorgan to eliminate certain jobs -- though most of those employees were able to find opportunities in other parts of the business. "We are preparing to make sure we can retrain our people," he said. "We have had discrete areas where we did reduce jobs by 30% or 40%, and most of those people [were] offered jobs elsewhere."

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JPMorganChase, Bank of America, Citigroup, Goldman Sachs and Wells Fargo each exceeded analysts' expectations, although they arrived there through different combinations of consumer banking, markets, wealth management, commercial lending and investment banking arms. Earnings call commentary, however, converged on several themes, including that consumers continue to spend; credit quality remains sound; capital markets have regained momentum; and technology spending is becoming a permanent feature of operating budgets. AI arguably occupied a larger share of earnings discussions than in previous quarters, but management teams generally avoided portraying it as a quick route to lower costs. JPMorganChase Chairman and CEO Jamie Dimon said the bank now has roughly 1,000 AI use cases under development across the company, but he cautioned investors against assuming that the economic benefits will remain inside financial institutions. "AI will have its give-and-takes," Dimon said during a Tuesday (July 14) conference call. "The ultimate beneficiary of AI will be our customers," reflecting his view that competing firms will adopt many of the same capabilities over time. Bank of America described AI in similarly operational terms. Chief Financial Officer Alastair Borthwick said Tuesday the bank's work centers on "growth, efficiency, risk management and resiliency," adding that approximately 300 AI use cases have been approved and more than 100 have already been deployed throughout the organization. Applications range from software development to tools used by relationship managers and financial advisers, illustrating how AI is being woven into day-to-day operations rather than isolated inside innovation teams. Goldman Sachs connected AI to client demand for financing. Chairman and CEO David Solomon said Tuesday the rapid expansion of AI infrastructure is producing financing needs that extend beyond Silicon Valley. "We are in the relative early innings of a very, very significant AI buildout cycle," Solomon said. "We see lots of opportunities to deploy capital to our clients to finance this infrastructure buildout." Investment in data centers, energy production and related infrastructure are drivers of advisory, financing and capital markets activity, Solomon said. Citigroup also made clear that technology spending will continue even as investors scrutinize expense growth. CEO Jane Fraser said Tuesday the bank is prepared to step up investment during the second half of the year if business conditions remain favorable, with AI sitting alongside technology platforms and marketing as priorities. "We're making investments across the flywheel," Fraser said. "It's also importantly in AI to drive scale economics as well. All of this will translate into measurable growth." When asked by analysts whether those investments were primarily defensive or intended to capture new business, her answer was concise: "Both." The emphasis on technology was matched by equally consistent commentary about digital banking. Rather than treating mobile banking and digital engagement as customer conveniences, executives described them as operating platforms that lower servicing costs, while deepening customer relationships and creating opportunities to sell additional products. Bank of America illustrated the shift with continued expansion across its digital franchise. The bank reported approximately 50 million active digital banking users, about 24 million active Erica users and roughly 70% of consumer sales completed through digital channels. Management also highlighted AI tools used internally by employees, reinforcing the view that digital transformation now extends beyond customer-facing applications. Credit Holds Steady Management teams pointed to a consumer backdrop that remained stable despite elevated interest rates. Bank of America CEO Brian Moynihan said the firm remains comfortable with current credit conditions, citing continued labor-market strength as an important factor supporting household finances. The bank's results reflected that assessment. Provision for credit losses declined from a year earlier, while average deposits rose to $2.02 trillion and average loans and leases increased to $1.22 trillion. Every major business segment contributed to year-over-year earnings growth. Citigroup echoed that assessment. Chief Financial Officer Gonzalo Luchetti said the bank continues to see "a stable credit environment," adding that "the U.S. consumer has been resilient." Both delinquencies and net credit losses improved from a year earlier, while purchase activity remained healthy, providing another indication that household finances have held together despite borrowing costs that remain above pre-pandemic levels. JPMorganChase delivered a similar message. Consumer and community banking revenue climbed 8% from a year earlier, while deposits and loans continued to expand. Credit costs remained manageable, with the bank recording $2.5 billion of credit costs, including net charge-offs and a modest reserve build, a level that management did not characterize as evidence of broad consumer stress. The same pattern extended to payments and business banking, where executives described transaction activity as remaining healthy while corporate clients kept capital markets buoyant. Citigroup's Treasury and Trade Solutions business posted its strongest quarter on record, reinforcing the importance of payments and treasury management as durable sources of fee income. The bank also reported 12% growth in general-purpose credit card purchase volume, 34% growth in banking revenue and 17% growth in markets revenue, reflecting stronger corporate activity alongside steady consumer spending. Goldman Sachs' Solomon said corporate clients are pursuing acquisitions, financing transactions and strategic investments at a faster pace than earlier in the year, with AI reshaping capital requirements across multiple industries. "Momentum across our franchise has accelerated as clients continue to pursue greater scale to invest and compete more effectively," Solomon said. The earnings reports suggest that the largest U.S. banks have entered the second half of 2026 with two tailwinds. Stable credit performance has allowed management teams to continue investing aggressively, while stronger client activity has provided the revenue needed to support those investments. For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.

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This effort by the country's largest bank, addressed during its Tuesday (July 14) earnings call, comes as many businesses are eyeing their AI consumption amid rising costs. Chief Financial Officer Jeremy Barnum addressed the need for using models when appropriate, citing the example of employing the AI to create report summaries. "As you know, the tools are quite good at doing that, and you really don't need the latest cutting edge incredibly expensive model to summarize an analyst report," he said. "The idea is use the right model for the right purpose, be smart about open source where appropriate, and ensure that you're getting value out of it ultimately." While "not financially meaningful this year," token expenses are still a key focus for JPMorgan, as they are for most other corporations, Barnum said. "Just for the avoidance of doubt, it is a trivial number for the first half of the year," the finance chief added. "We are forecasting some meaningful acceleration in that number for the second half of the year." Meanwhile, CEO Jamie Dimon said during the same earnings call that JPMorgan now has around 1,000 AI use cases under development, with approximately 50 representing the bank's largest efforts across things like fraud detection, risk management, marketing, prospecting, note-taking and document review. The technology should create "huge efficiency in certain parts of the company," Dimon said, adding that some business units have already cut staffing significantly and reassigned many employees to other parts of the organization. The CEO also cautioned against assuming those gains will remain exclusive to the largest banks. "The ultimate beneficiary of AI will be our customers," Dimon said, adding that competition will ultimately turn many productivity gains into better products, and reduced costs and errors rather than permanently higher bank margins. Also Tuesday, Bank of America CEO Brian Moynihan spoke of the need for AI controls during that lender's earnings call. "It has great utility," Moynihan said. "It has to be carefully managed. You have to have your data perfect. You have to have your rules base, so it doesn't make mistakes." Meanwhile, the PYMNTS Intelligence report "The Enterprise AI Benchmark Report: Financial Services Pulls Ahead in the Enterprise AI Race" found that businesses across financial services and insurance, healthcare, and media and advertising are investing more into AI. "As they do so, these enterprises are beginning to decide which projects deserve real capital and which still need proof," PYMNTS wrote recently.

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During JPMorganChase's second-quarter earnings call Tuesday (July 14), executives described spending patterns and credit performance that continued to exceed expectations despite elevated interest rates. Chief Financial Officer Jeremy Barnum said consumer spending was "robust across income segments," supported in part by tax refunds, while delinquencies came in "a little lower than we expected." The firm's internal data does not support a broad "K-shaped" view of the consumer, although households experiencing negative real wage growth remain an area the bank continues to monitor, Barnum said. Looking ahead, the principal driver of consumer credit performance has not changed. "When it comes to consumer credit performance, it's just about the labor market," Barnum said on the earnings call, which helped kick off earnings season on Wall Street. "It's been surprisingly resilient. So, for now, that's the narrative." The operating results reflected that picture. As detailed in company materials that accompanied earnings results, consumer and community banking revenue rose 8% from a year earlier to $20.3 billion, driven primarily by higher card net interest income associated with larger revolving balances. Average card services loans increased to $243.5 billion from $228.4 billion a year earlier, while card purchase volume reached $373.1 billion, up 10%. The card services net charge-off rate was 3.34%, compared with 3.4% a year earlier. The digital franchise also continued to expand. Active mobile customers increased 6% year over year to 63.7 million, while combined debit and credit card sales volume rose 10% to $535.8 billion. Average consumer and community banking deposits climbed 3% to $1.1 trillion. The figures indicate that payment activity, borrowing and customer engagement all continued to grow during the quarter, even as consumers faced higher borrowing costs. FinTech Competition Extends Beyond Traditional Banks Questions about AI prompted a broader discussion of how technology is reshaping competition across financial services. CEO Jamie Dimon said JPMorgan now has nearly 1,000 AI use cases under development, with roughly 50 representing the bank's largest efforts across fraud detection, risk management, marketing, prospecting, note-taking, document review and other functions. The technology should create "huge efficiency in certain parts of the company," Dimon said, adding that some business units have already reduced staffing substantially and reassigned many employees elsewhere in the organization. Dimon also cautioned against assuming those gains will remain exclusive to the largest banks. "The ultimate beneficiary of AI will be our customers," Dimon said, adding that competition will ultimately convert many productivity gains into better products, lower costs and fewer errors rather than permanently higher bank margins. The competitive landscape extends beyond large banking institutions. Discussing future investment priorities, Dimon cited Stripe, PayPal, Block, Chime, SoFi and Revolut as competitors that require JPMorgan to continue investing in technology, products and customer experience. He said the bank has opportunities for organic growth, but maintaining that position requires continued investment as banks and FinTech firms develop new capabilities. Dimon also said AI tools will become available throughout the industry as technology providers distribute them more broadly. Smaller institutions will gain access to many of the same capabilities through established technology vendors and FinTech companies, reinforcing his view that AI will become a widely available operating tool rather than a feature reserved for the largest banks. Shares were up 2.5% in early trading Tuesday. For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.