Wall Street is in for a sweet payday this year, but AI could mean leaner teams ahead

"After a year defined by volatility and political uncertainty, Wall Street is heading into the holiday season on a high note - but it may be dampened by the existential threat of AI shaking up their jobs. Year-end bonuses are projected to rise across nearly every business line, according to a new report released Wednesday by compensation consultancy Johnson Associates, with traders being the big winners - who could see up to 25% increases - followed by mergers advisors and wealth managers."

""It's a remarkable, not only recovery, but a broad-based recovery across classes - the sexy and the mundane have all kind of moved up together," said Alan Johnson, the firm's founder. "Which is unusual." Yet the same report delivers a warning that automation is about to reshape the financial workforce. Head count could fall 10% to 20% in the next three to five years as banks and asset managers accelerate the adoption of artificial intelligence to streamline operations and trim costs, it warns."

""If you have skills, you may do better," Johnson told Business Insider. "There'll be fewer of you - but you'll be cherished more." That said, David Solomon, the chief executive of Goldman Sachs, recently said at a conference that he thought the firm would have more employees - not fewer - in the coming decade, precisely because of AI. For Wall Street, last year's bonus pool was big."

Year-end bonuses are projected to rise across nearly every Wall Street business line, with traders potentially receiving up to 25% increases and mergers advisors and wealth managers also benefiting. A few sectors, including real estate and venture capital, are expected to remain flat. The recovery is broad-based across both high-profile and routine roles. Rising adoption of artificial intelligence could reduce head counts by 10% to 20% over the next three to five years as banks and asset managers streamline operations and cut costs. Skilled employees may be retained at higher value, while some firms foresee workforce growth because of AI. Last year's financial-services bonus pool approached $48 billion, with wide payout ranges across roles.

Read at Business Insider