Morgan Stanley doubles its forecast: European banks could shed 20% of jobs on AI

The May estimate is twice the bank’s January figure, with workforce cuts already underway at UBS, ABN Amro, and HSBC. Morgan Stanley doubled its forecast for AI-driven job losses across European banking, estimating that as much as 20% of total banking employment could be eliminated by 2030. The revised estimate rises to roughly 400,000 jobs from a 200,000-job, 10% projection published in January. The functional focus remains on back-office, KYC-and-AML compliance, and middle-office risk-monitoring roles. The change reflects faster public commitments to AI-led restructuring and earnings-call signals that productivity gains from generative AI are materializing sooner than expected. ABN Amro plans about 20% workforce cuts by 2028 through automation, HSBC targets around 20,000 job reductions framed as productivity-led, and UBS expects about half of its $10bn cost-saving programme to be delivered through 2026.

"The May estimate is twice the bank's January figure, and the workforce cuts are already happening at UBS, ABN Amro and HSBC. Morgan Stanley has doubled its forecast for AI-driven job losses across the European banking sector, estimating that as much as 20% of total banking employment could be eliminated by 2030 as lenders push generative-AI tools into back-office, risk and compliance workflows."

"The revised figure, reported by Bloomberg on Thursday, lifts the estimate to roughly 400,000 jobs from the 200,000-job, 10% projection the bank published in January. The doubling is the part worth pausing on. Five months ago, Morgan Stanley analysts argued AI deployment across the European banking sector would translate into around 200,000 cumulative role eliminations by the end of the decade, concentrated in back-office, KYC-and-AML compliance, and middle-office risk-monitoring positions."

"What changed in five months, on the bank's framing, is the pace at which individual European banks have begun publicly committing to AI-led restructuring, alongside earnings-call signals that productivity gains from generative-AI deployment are materialising faster than even bullish 2025 forecasts had assumed. The bank-by-bank evidence is concrete. ABN Amro announced in November 2025 that it would cut roughly 20% of its full-time workforce by 2028, primarily through automation."

"HSBC has committed to cutting around 20,000 jobs as AI absorbs back-office work, with chief executive Georges Elhedery explicitly framing the reductions as productivity-led rather than cost-driven. UBS, which is still working through the Credit Suisse integration, has begun a fresh round of cuts in Switzerland that the bank expects to deliver roughly half of its targeted $10bn cost-saving programme through 2026."

Read at TNW | Eu