Jamie Dimon reveals AI eliminated up to 40% of jobs in some JPMorgan divisions

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."

JPMorgan Wants Employees to Go Easy on AI Usage | PYMNTS.com

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.