Morgan Stanley analysts published a research note on May 28 estimating that artificial intelligence could reduce headcounts in European banks by 10% to 20% over the next five years, with productivity gains reaching around 30% [1, 2]. Much of the expected job reduction will come through voluntary departures, including retirements, rather than forced layoffs [1, 2]. The analysts also forecast that staff cuts could lead to cost savings equal to 4% to 9% of total operating costs for these banks [2].
Several major banks are already linking job cuts to AI adoption. Standard Chartered has announced plans to reduce nearly 8,000 support roles over the next four years. CEO Bill Winters clarified the cuts would affect “lower-value human capital,” though he later apologized for that phrase [2]. HSBC is reportedly exploring cuts of about 20,000 jobs, primarily targeting middle- and back-office roles, based on AI-driven efficiencies. This figure comes with a medium confidence level given ongoing deliberations [2].
Commerzbank CEO Bettina Orlopp recently said AI will generate cost savings of around €350 million in the coming years. She stated, “AI will lead to cost savings worth about €350 million (RM1.6 billion) in a few years,” emphasizing the financial benefits linked directly to AI implementation [2].
In addition to cost-cutting, AI is expected to boost revenues by helping banks better identify customer product needs. This advantage could particularly benefit institutions with integrated retail, savings, insurance, and wealth management platforms [2].
The timeline of events started in early 2026 when HSBC began exploring AI-related job cuts followed by Standard Chartered’s announcement in May. Commerzbank’s cost-saving forecast was stated just a week before August 18, 2026 [1, 2].
Banks will continue to monitor AI developments and plan workforce adjustments accordingly over the next several years.
