AI’s employment impact is getting bigger and bigger! HSBC considers layoffs

# Zhao Ying

Source: Wall Street CN

The impact of AI on financial jobs has shifted from concept to reality. HSBC Holdings is assessing plans to cut about 20,000 jobs over the next three to five years, representing 10% of its global workforce, with non-client-facing back-office and middle-office roles bearing the brunt. This shift is not an isolated case — Bloomberg Intelligence predicts that major global banks could eliminate as many as 200,000 positions combined.

The impact of artificial intelligence on the financial industry’s job market is moving from theory to reality.

According to a Bloomberg report on Thursday, HSBC Holdings is evaluating a large-scale workforce reduction in the coming years, as CEO Georges Elhedery bets on AI technology to shrink its middle and back-office operations. The move is seen as one of the early signs that technological change is reshaping the workforce landscape on Wall Street.

People familiar with the matter said the potential cut would affect about 20,000 positions, roughly 10% of HSBC’s approximately 210,000 global employees. The hardest-hit roles are expected to be non-client-facing positions within global service centers.

## Up to 20,000 jobs at risk, with middle and back offices first in line

Citing people familiar with the matter, Bloomberg reported that the layoff plan would be phased in as a medium-term program spanning three to five years. Some job reductions may be achieved through divestments or business exits, rather than purely direct headcount cuts. The review also includes roles HSBC does not intend to refill, the sources added.

HSBC Chief Financial Officer Pam Kaur said at a Morgan Stanley conference this week that the bank sees opportunities to use AI to reduce costs and boost employee productivity. She noted that AI can be applied in customer service centers, know-your-customer (KYC) teams, and transaction monitoring to improve operational efficiency.

Discussions about the plan began before the recent escalation of tensions in the Middle East. Since becoming CEO in 2024, Georges Elhedery has carried out sweeping restructuring at HSBC, cutting thousands of jobs while selling, merging, or closing some businesses.

HSBC also previously announced it expects to reach its $1.5 billion cost-reduction target in the first half of this year, six months ahead of schedule.

## AI reshapes banking employment, industry-wide impact emerges

HSBC’s move is not an anomaly, but a microcosm of a profound shift across the entire financial industry.

A Bloomberg Intelligence report released last year showed that as AI increasingly takes over tasks previously done by humans, major global banks could eliminate as many as 200,000 positions over the next three to five years. Chief information and technology officers surveyed expected an average net headcount reduction of about 3%.

Within HSBC, Elhedery is also driving a cultural shift, introducing a more Wall Street-style compensation structure — high performers will receive a larger share of bonuses, while underperformers face greater pressure to leave. At the same time, he has continued and deepened his predecessor’s “Asia strategy,” taking private the group’s Hong Kong subsidiary Hang Seng Bank, betting on long-term growth in Asian financial markets.

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