AI’s impact on employment is growing! HSBC considering major layoffs

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

According to a Bloomberg report on Thursday, HSBC Holdings is evaluating the possibility of large-scale layoffs in the coming years, as CEO Georges Elhedery bets on AI technology to reduce the size of the middle and back office. This move is seen as one of the early signs of technological transformation reshaping the Wall Street workforce landscape.

According to people familiar with the matter, the potential layoffs could reach about 20,000 positions, accounting for about 10% of HSBC's global total of approximately 210,000 employees. The positions most likely to be affected are those non-customer-facing roles in global service centers.

Layoffs may reach 20,000, with middle and back office bearing the brunt

Bloomberg, citing people familiar with the matter, reported that the layoff plan will be implemented as a phased, medium-term initiative lasting three to five years. Some position reductions may be achieved through the sale or withdrawal of businesses, rather than simply direct layoffs. The people familiar also said the assessment covers positions HSBC does not intend to refill through hiring.

Pam Kaur, HSBC's Chief Financial Officer, said at a Morgan Stanley event this week that the bank sees opportunities to use AI to reduce costs and improve employee productivity. She noted that AI could be applied to customer service centers, know-your-customer (KYC) teams, and trade monitoring fields to enhance operational efficiency.

Discussion on this plan began before the recent escalation in the Middle East. Since taking over as CEO in 2024, Georges Elhedery has carried out major restructuring at HSBC, cutting thousands of positions and selling, merging, or closing multiple businesses.

HSBC previously announced that it expects to achieve its goal of $1.5 billion in cost reductions six months ahead of schedule, within the first half of this year.

AI is reshaping the employment landscape in the banking sector, and industry-wide impact is emerging

HSBC's move is not an isolated case, but a microcosm of deep transformations throughout the financial sector.

A Bloomberg Industry Research report released last year shows that as AI gradually takes over tasks previously performed by humans, global banks may reduce up to 200,000 jobs combined over the next three to five years. The average net layoff forecast by surveyed CIOs and CTOs is about 3%.

Within HSBC itself, Elhedery is also promoting a cultural transformation, introducing a more Wall Street-style compensation structure—high-performing employees will receive a greater share of bonuses, while underperformers will face greater pressure to leave. At the same time, he is continuing and deepening his predecessor’s "Asia strategy," privatizing the Hong Kong subsidiary Hang Seng Bank and betting on the long-term growth of Asian financial markets.

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