The Wall Street is entering a new era of artificial intelligence, and its effects on the workforce are starting to take shape. Major banks such as JPMorgan Chase and Goldman Sachs are rolling out strategies to integrate AI into their operations, a move that could transform the way knowledge-based tasks are performed at scale.
This shift means that even in a record-breaking year for Wall Street, when trading and investment banking generate billions in revenue, typically a period of robust hiring, these firms are bringing on fewer new employees.
JPMorgan reported on Tuesday that its third-quarter profit rose 12% year-over-year to $14.4 billion, yet its workforce grew by only 1%. CFO Jeremy Barnum told analysts that managers have been instructed to limit new hires as the bank expands the use of AI throughout its operations.
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JPMorgan, the world’s largest bank by market capitalization and a major force in both consumer and investment finance, plans to integrate AI across all client interactions, employee workflows, and internal operations, a strategy first reported by CNBC last month.
“The bank has a very strong bias against having the reflexive response to any given need to be to hire more people,” Barnum said Tuesday, noting that JPMorgan employed 318,153 people as of September.
JPMorgan CEO Jamie Dimon told Bloomberg earlier this month that while AI will replace certain roles, the bank plans to retrain affected employees, and overall staffing levels could still increase.
At competing investment bank Goldman Sachs, CEO David Solomon on Tuesday outlined the firm’s plan to restructure around AI, following a quarter in which profits jumped 37% to $4.1 billion.
“To fully benefit from the promise of AI, we need greater speed and agility in all facets of our operations,” Solomon told employees in a memo this week.
“This doesn’t just mean re-tooling our platforms,” he said. “It means taking a front-to-back view of how we organize our people, make decisions, and think about productivity and efficiency.”
The impact on employees, Solomon said, is that Goldman would “constrain headcount growth” while letting go of a small number of staff members this year.
The AI strategies outlined by the country’s largest banks echo similar warnings from tech giants like Amazon and Microsoft, whose executives have prepared employees for potential disruptions, including hiring slowdowns and job cuts.
In the banking sector, experts say that employees in operational positions, often called the back and middle office are considered the most vulnerable to AI-driven job changes.
For example, in May, a JPMorgan executive informed investors that the number of operations and support staff is expected to drop by at least 10% over the next five years, even as business activity expands, due to the impact of AI.
“We don’t take these decisions lightly, but this process is part of the long-term dynamism our shareholders, clients, and people expect of Goldman Sachs,” he said in the memo. “The firm has always been successful by not just adapting to change, but anticipating and embracing it.”