Most Americans have never heard of Standard Chartered Plc. It is one of the 30 largest banks in the world, after the Chinese banks pulled out. Its CEO, Bill Winters, made the point, as some of his colleagues in the financial industry have, that job losses at his bank will be in the thousands or tens of thousands due to AI. Among bank executives, it is close to a chorus
His comments about the employees involved are highly insulting. He called them “lower-value human capital,” according to Bloomberg. He described a plan under which 15% of Standard Chartered’s support staff will be gone in less than five years. Bloomberg calculates that the bank has 52,000 people who fit this description. And his assessment was nothing short of brutal. At a conference he said, “It’s not cost cutting; it’s replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in,” Nevertheless, the people fired are human.
There are two schools of thought about AI’s effects on jobs. And within one of these, there are two more. The first case is that AI will make more products and somehow add people to the workforce. The arguments for this are usually less than convincing.
The cases for job losses fall into separate parts. One is that well-educated people will not find jobs at well-paying companies. This includes financial firms, banks, and large consulting firms. One example of this is job cuts at McKinsey, the world’s leading consultancy. AI can do what low-level analysts can do, even if those analysts graduate from Harvard Business School.
The other part of the job cut argument is that the most poorly paid jobs in America will be eliminated. People who work the floors at Walmart (NYSE: WMT | WMT Price Prediction) will be replaced by AI-driven robots. These can find people’s merchandise and act as cashiers. This include a retail sector that employs millions of people. The sector is led by McDonald’s (NYSE MCD) and Walmart, but it is much larger than those.
Although his comments are cruel, Winters sees a future in which he can make more money, as long as he fires enough people.
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