Report states HSBC plans to lay off 20,000 employees, with 10% of jobs potentially replaced by AI

Question: How will the widespread adoption of AI in banking change the future employment landscape?

IT Home, March 19 — According to Bloomberg, HSBC is planning significant layoffs over the next few years, with CEO George Elhedery betting on AI to streamline back-office departments. This is one of the first signs of technology reshaping the workforce on Wall Street.

The image appears to be AI-generated.

Sources familiar with the matter say that roles within global service centers that do not directly interact with customers are expected to be most affected, though assessments are still in early stages. One person mentioned that the final adjustments could impact about 20,000 jobs, roughly 10% of HSBC’s total workforce.

Some insiders indicate that discussions began before recent conflicts in the Middle East, and no final decision has been made yet.

Since taking office in 2024, Elhedery has launched an aggressive restructuring of the bank. He has cut thousands of jobs, sold some businesses, and merged or closed others. By the end of 2025, HSBC will have approximately 210,000 employees.

Sources say the assessment includes plans to stop filling vacant positions, but no final decision has been finalized. Others suggest some layoffs may also be achieved through the sale or exit of certain businesses.

A Bloomberg Intelligence report last year indicated that as AI gradually replaces human tasks, the global banking industry could cut up to 200,000 jobs in the next three to five years. The chief information and technology officer surveyed in the report expects an average net reduction of 3% in staff numbers.

Sources say HSBC’s layoffs will be part of a mid-term plan spanning three to five years.

Facing competition from domestic and international peers, the CEO is also pushing for a cultural shift. The bank is moving toward a more Wall Street-style compensation model: top performers will share larger bonuses, while underperformers will be encouraged to seek other opportunities.

Elhedery is also doubling down on the previous focus on Asia, privatizing the Hong Kong subsidiary Hang Seng Bank and heavily betting on the growth potential of this Asian financial hub.

Recently, HSBC announced it expects to achieve a cost reduction of $1.5 billion (approximately 10.33 billion RMB at current exchange rates) in the first half of the year, ahead of the original schedule by six months.

HSBC’s CFO, Pam Cole, stated at a Morgan Stanley conference on Wednesday that the bank sees opportunities for AI to both reduce costs and improve employee efficiency. Cole said the company plans to apply AI in customer service centers, customer due diligence teams, and transaction monitoring to enhance operational cost-effectiveness.