JPMorgan to Cut Headcount in Some Divisions Due to AI

JPMorgan Chase is attempting to make use of AI to chop down its headcount.

On the firm’s annual investor day on Monday, JPMorgan’s CEO of client and group banking, Marianne Lake, 56, gave a presentation predicting that AI would enable the financial institution to cut back worker numbers by 10% within the operations and account providers departments. The operations division processes statements and funds, whereas the account providers unit manages day-to-day transactions.

Associated: JPMorgan Says Its AI Cash Flow Software Cut Human Work By Almost 90%

Lake, who runs Chase Financial institution and its bank card enterprise, stated that 10% was a modest estimate — the financial institution would most probably “ship extra” in headcount reductions.

“I’d take the over on this projection and guess that we’ll ship extra,” Lake stated, per Business Insider. She didn’t disclose a timeline for when the workforce reductions would happen or which roles they might influence.

^{Marianne Lake. Photographer: Jin Lee/Bloomberg through Getty Pictures}

JPMorgan’s Chief Monetary Officer, Jeremy Barnum, 52, disclosed on the identical investor day occasion that the financial institution would spend lower than $95 billion on hiring this yr as AI makes operations extra environment friendly. That is a drop from $200 million in hiring efforts in 2023 and $100 million in 2024.

“We’re asking individuals to withstand headcount progress the place doable and improve their give attention to effectivity,” Barnum acknowledged, per BI. “It isn’t simply the amateurs who’re helped by these [AI] instruments. It is wonderful stuff, and we now have excessive hopes for the effectivity acquire.”

JPMorgan’s headcount has grown in recent times, swelling over 20% from 255,350 workers in 2020 to over 317,000 in 2024. On the identical time, the financial institution’s internet earnings has doubled from $29.13 billion in 2020 to a record-high $58.5 billion in 2024.

Associated: JPMorgan Chase CEO Jamie Dimon Isn’t Worried About AI Taking Over Jobs — Here’s Why

Who will take over as JPMorgan CEO?

At JPMorgan’s investor day, traders had been eyeing the executives who might presumably take over the CEO place from Jamie Dimon when he retires within the next four years.

In keeping with The Wall Street Journal, Lake is a high contender for the CEO spot. She began on the financial institution as an accountant and finally grew to become Chief Monetary Officer from 2013 to 2019, earlier than being promoted to her present place.

The opposite two CEO hopefuls are reportedly the co-heads of JPMorgan’s company and funding financial institution, Doug Petno, 59, and Troy Rohrbaugh, 55.

Petno began as an funding banker at JPMorgan earlier than finally changing into the CEO of economic banking from 2012 to 2024. Rohrbaugh joined JPMorgan in 2005 as a managing director and was beforehand the top of Macro Markets, which incorporates the financial institution’s international trade and rising markets companies.

Associated: JPMorgan Chase CEO Jamie Dimon Shares Four Tips for Leaders

Dimon stated on Monday on the investor occasion that he nonetheless intends to retire as CEO throughout the subsequent 4 years, although he and JPMorgan have but to publicly announce a successor.

“What we have instructed you is that the board has intent… to be excited about succession, and we needs to be doing that,” Dimon stated, per Barron’s.

Dimon has led the financial institution since 2006. JPMorgan shares have skyrocketed by nearly 200% over the previous 5 years.