Standard Chartered Signals AI Shift With 7,000-Job Cut Plan

Standard Chartered has announced plans to lay off more than 7,000 employees globally over the next four years by expanding the use of artificial intelligence (AI) technologies. The London-based global banking giant said the move is aimed at reducing costs and increasing profitability through automation of banking operations using modern technologies.

Among major global banks, Standard Chartered has become the first to formally unveil such a large-scale workforce reduction plan citing AI technology. Following the announcement, the bank’s share price rose by nearly 2.5 percent on the Hong Kong stock market.

“This is not cost-cutting, but technology replacement”

In a strategic update released on Tuesday, the bank said around 15 percent of positions in its corporate functions and back-office divisions will be eliminated by 2030. According to Reuters estimates, more than 7,000 employees out of the 52,000 working in these divisions are expected to lose their jobs. The bank currently employs around 82,000 people worldwide.

Standard Chartered Chief Executive Officer (CEO) Bill Winters told reporters, “This should not be viewed simply as cost-cutting. We are essentially replacing lower-value human resources with financial and investment capital through technology.”

However, he added that some affected employees will be given opportunities for reskilling to adapt to new technologies.

Regions expected to face the biggest impact

Bill Winters said the largest impact of the layoffs will fall on the bank’s back-office operations and global centers. Employees at Standard Chartered offices in Chennai and Bengaluru in India, Kuala Lumpur in Malaysia, and Warsaw in Poland are expected to be the most affected.

AI will serve as the primary driving force behind fully automating the bank’s core banking systems.

Focus now on higher profitability

Standard Chartered has set a target to raise its Return on Tangible Equity (ROTE) to 15 percent by 2028 and to 18 percent by 2030, figures significantly higher than general market analysts’ forecasts.

Despite geopolitical uncertainties in the global economy caused by the Middle East and Iran crisis, the bank said it remains fully confident about its growth prospects.

Commenting on the matter, Bill Winters said, “Our resilience is extremely strong in overcoming geopolitical and market risks and achieving our targets.”

DBTech/BMT/OR