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

The European banking sector is about to learn a hard lesson about efficiency. According to a new analysis from Morgan Stanley reported According to the Financial Times, more than 200,000 jobs in European banks could disappear by 2030 as lenders switch to AI and close physical branches. That is about 10% of the working population at 35 major banks.

The bloodshed will hit hardest in back-office operations, risk management and compliance, the unglamorous guts of banking, where algorithms are believed to be able to tear through spreadsheets faster and more effectively than humans. According to Morgan Stanley’s report, banks are salivating over the expected 30% efficiency gain.

The cuts are not limited to Europe. Goldman Sachs had warned US workers in October of job cuts and a hiring freeze until the end of 2025 as part of an AI push called “OneGS 3.0” that focuses on everything from customer onboarding to regulatory reporting.

Some institutions are already swinging the ax. Dutch lender ABN Amro plans to cut a fifth of its workforce by 2028, while the CEO of Société Générale has declared that ‘nothing is sacred’. Still, some European banking leaders are urging caution, with a JPMorgan Chase executive telling the FT that if junior bankers never learn the fundamentals it could come back to haunt the industry.