AI News Monitor

Thousands of workers will be made redundant at banking industry leader, Morgan Stanley, with AI ready to replace them.  

Finance sector leader, Morgan Stanley, is planning to lay off up to 2000 employees as AI takes over. The company is eager to reduce operating costs amid increasing economic uncertainty. However, insiders at the company report that the plans have been in place long before current market challenges.

Morgan Stanley has a workforce of around 80,000, which means that the downsizing will affect 2-3 percent of staff. Workers with poor performance and those based in certain locations stand a higher chance of being laid off.

The redundancies are to cut across all departments of the firm, except for its 15,000-strong army of financial advisers. A number of roles in the organization have been taken over by AI and automation. Those workers will be told that they are no longer needed. Sources at the bank expect even more employees to be laid off over the next few years due to AI taking over their job, according to Bloomberg.

This comes as professionals worldwide continue to grapple with the implications of AI in the workplace. AI chatbots can interact with customers, answer questions, and address concerns. They can read through thousands of pages of documents and write error-free reports. While generative AI works only with text and images, the introduction of AI agents means that AI can now also handle many tasks that humans can.

The banking industry has been identified as where human workers are most at risk of AI takeover. Experts believe that more than half of jobs in the sector have the potential to be automated. Additionally, banks—including Morgan Stanley—have been increasingly utilizing AI to automate various tasks.

Since 2023, Morgan Stanley has developed various AI tools for banking. Company executives believe some of these could reduce human effort by up to 90 percent. For example, the bank has an AI tool that can summarize video meetings, list action points, and draft follow-up emails. That takes away a significant chunk of what a human assistant could be asked to do.

The firm undoubtedly still needs human workers. However, these developments in AI may have allowed executives to more easily place workers first on the chopping block as cost-cutting needs arose.

Interestingly, Morgan Stanley is not the only bank where human workers could soon be cleaning out their desks. A recent report by Bloomberg Intelligence made projections that up to three percent of staff at 93 major banks could lose their positions to AI. The list includes heavyweights such as Goldman Sachs, JPMorgan Chase, and Citigroup Inc.

Closer analysis of the numbers suggests that an estimated 200,000 jobs in the banking sector could be at risk within the next 3-5 years. According to senior analyst at Bloomberg Intelligence, Tomasz Noetzel, “Any jobs involving routine, repetitive tasks are at risk.”

There are some expectations that AI will transform jobs rather than eliminate them completely. Nevertheless, human workers still need to upskill and reskill if they are to have a chance.