The employment impact of AI is becoming increasingly significant! HSBC is considering large-scale layoffs

The impact of artificial intelligence on the employment market in the financial industry is transitioning from concept to reality.

According to Bloomberg on Thursday, HSBC Holdings is assessing the possibility of large-scale layoffs in the coming years, with CEO Georges Elhedery betting on AI technology to reduce the size of back-office operations. This move is seen as an early signal of how technological transformation is reshaping the workforce landscape on Wall Street.

According to informed sources, the potential scale of layoffs could reach about 20,000 positions, accounting for approximately 10% of HSBC's global workforce of around 210,000 employees. The most affected positions are expected to be non-customer-facing roles within global service centers.

Layoff scale could reach 20,000, with back-office roles hit hardest

According to Bloomberg citing informed sources, the layoff plan will be implemented in phases as part of a medium-term strategy spanning three to five years. Some position reductions may be achieved through the sale or exit of businesses rather than purely through direct layoffs. Informed sources also indicated that the assessment will cover positions that HSBC does not intend to replenish.

HSBC Chief Financial Officer Pam Kaur stated at a Morgan Stanley conference this week that the bank sees opportunities to reduce costs and enhance employee productivity through AI, noting that AI can be applied in areas such as customer service centers, Know Your Customer (KYC) teams, and transaction monitoring to improve operational efficiency.

Discussions about this plan began before the recent escalation of the situation in the Middle East. Since taking over as CEO in 2024, Georges Elhedery has implemented significant restructuring at HSBC, resulting in the elimination of thousands of positions while selling, merging, or closing certain businesses.

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

AI reshaping the employment landscape in banking, industry-wide impact already evident

HSBC's actions are not an isolated case but rather a reflection of deep changes across the financial industry.

A report released by Bloomberg Industry Research last year indicated that as AI gradually takes over tasks previously performed by humans, major banks worldwide could collectively cut up to 200,000 positions over the next three to five years. CIOs and CTOs surveyed expect an average net reduction of about 3%.

Internally at HSBC, Elhedery is also driving a cultural transformation, introducing a more Wall Street-style compensation mechanism—high-performing employees will receive a larger share of bonus distributions, while underperformers will face greater pressure to leave. Meanwhile, he has continued and deepened his predecessor's "Asian strategy," privatizing its Hong Kong subsidiary Hang Seng Bank and betting on the long-term growth of the Asian financial market