Citibank has suggested that in the span of next five years, it will be letting go of nearly half of its technology and operations staff. This is largely because automation is taking over traditional jobs in these sectors.
Automation and better technology have been labelled as the main culprits for future unemployment. This is because robots and automation will be able to do the jobs that were previously held by human beings.
In 2017, research firm PwC conducted a study that revealed that countries across the world will begin losing jobs to automation. The study noted that in the next 15 years, 40 percent of jobs in the U.S. may be vulnerable to automation and robots. In the same time frame, 35% of jobs in Germany could be replaced by automation and 30% of jobs in UK will become vulnerable. In Japan, 21% of jobs will become vulnerable to robots and automation.
Developing nations like India with a growing labor force will also face a massive challenge in the years ahead. According to research by human resources (HR) solutions firm PeopleStrong, by 2021 nearly a quarter of people in India will be losing their jobs to automation. “These job cuts due to automation will not happen immediately, but the impact will become prominent by 2020. The change has started, with companies introducing bots for customer service, managing warehouses, etc.,” said Pankaj Bansal, co-founder and chief executive officer of PeopleStrong.
Citibank is the consumer division of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, and later became First National City Bank of New York. Citibank provides credit cards, mortgages, personal loans, commercial loans, and lines of credit.
In the past, multiple large organizations have signalled their intent to streamline their workforce in favour of automation. One of the biggest proponents of this is Deutsche Bank. The bank has incurred criticism for the five-year plan it announced a few years ago. As part of this restructuring plan, it had announced that it would be cutting 9,000 of its 100,000 direct employees. In addition, 6,000 of its 30,000 indirectly employed contractors would also be let go.
John Cryan, former CEO of Deutsche Bank, said, “In our banks we have people behaving like robots doing mechanical things, tomorrow we're going to have robots behaving like people.
Now, Citibank has issued a similar warning that it will be letting go of a substantial number of its employees. In June 2018, it suggested that it will shed up to half of its 20,000 technology and operations staff in the next five years. Technology and operations account for 40% of the total headcount of Citibank’s staff. The organization has cited automation as the primary reason for this decision.
Barclays investment bank boss Tim Throsby said that the future would see a smaller number of employees making more money, while machines took over “lower-value tasks”. “If your job involves a lot of keyboard hitting then you’re less likely to have a happy future,” he added. Richard Gnodde, head of Goldman Sachs International, said: “There are so many functions today that technology has already replaced and I don’t see why that journey should end any time soon.”
Our assessment is that automation will continue to result in job loss not only in banking but other sectors as well. We believe that the advances in banking mean that a large number of straightforward jobs such as data entry will soon be replaced by automation. We also believe that with the rise of robo-advisors, customers could soon be given financial assistance by robots instead of an actual person. In order to ensure unemployment rates do not rise, governments should begin investing in skill development.