“The Biggest Reduction In History”: Wells Fargo’s Mayo Predicts 200,000 Banking Jobs Lost Over Next Decade
Wells Fargo analyst Mike Mayo sees a major change coming in the world of U.S. banks. In fact, he predicts that they could wind up doing away with 200,000 jobs, or 10% of the industry’s total employee count, over the next decade.
The shift would come as a result of looking to increase profitability in an age of automation and changing customer behavior. “This will be the biggest reduction in US bank headcount in history,” Mayo told the Financial Times.
The jobs most at risk are in-person branch jobs and call centers; as if it wasn’t already difficult enough to get any banking done in person or over the phone with an actual human being.
Mayo’s analysis gels with Department of Labor predictions, which are calling for a 15% decline in bank teller jobs over the next decade. In addition to technological advancements, non-bank lenders entering the market have also put pressure on banks, Mayo said.
Names like PayPal and Amazon entering financial services are some of the concerns of high profile banking executives, like J.P. Morgan’s Jamie Dimon, who mentioned it in his annual letter to shareholders last month.
“Digitisation accelerated and that played to the strength of some fintech and other tech providers,” Mayo says in his note. “We believe that banks are likely to see headcount reductions accelerate as the economy reopens and conditions normalize. Long-term, improving efficiency is less luxury than necessity.”
“Banks must become more productive to remain relevant. And that means more computers and less people,” he continued. He predicts that backlash will be limited as most of the cuts can occur as a result of attrition, and not layoffs, over the next 10 years.
He concluded: “If I was giving advice to my kids, I’d say you probably don’t want to go into the financial industry. It’s likely to be a shrinking industry.”
The U.S. banking sector has seen jobs remain roughly flat at about 2 million for the last decade, FT reported.
Tue, 05/18/2021 – 14:55
Jump To The Original Source