European Banks Brace for 200,000 Job Cuts as AI Reshapes Sector

• European banks anticipate up to 200,000 job cuts by the decade's end, driven by AI and automation, according to a Morgan Stanley analysis reported by the Financial Times.
• These reductions represent approximately 10% of the workforce across 35 major European banks, primarily affecting back-office functions like risk management and compliance.
• Banks aim for up to 30% efficiency gains through deeper AI integration, leading to increased automation and the closure of physical branches.
• The trend extends beyond Europe, with Goldman Sachs implementing job cuts and a hiring freeze in the US as part of its AI-led OneGS 3.0 strategy.
• ABN Amro plans to cut one-fifth of its workforce by 2028, while a JPMorgan Chase executive warns against excessive automation hindering junior bankers' skill development.

Why It Matters: AI is set to drastically reshape the banking sector, leading to significant job cuts and efficiency gains globally.