TL;DRDimon says AI cut 30 to 40 percent of jobs in some JPMorgan units but competitive dynamics mean margins will not grow as a result.
JPMorgan Chase has cut jobs by as much as 40 percent in some parts of the bank using artificial intelligence, CEO Jamie Dimon told analysts during the company’s second-quarter earnings call on Tuesday. But investors hoping the technology will dramatically improve profit margins are likely to be disappointed. Dimon said that in a competitive market, every bank will deploy AI to serve customers better, and no single institution gets to pocket the savings.
“You don’t uniquely benefit from AI,” Dimon said after an analyst asked when the technology would slow the growth of JPMorgan’s expenses. “If that were true, our margins would be 80 percent today because of computerisation over the last 20 years.” When pressed on whether AI would create a leaner bank over time, Dimon acknowledged that the technology would deliver huge efficiency gains and some job cuts, but said most affected employees had been offered positions elsewhere within the firm.
The comments came on the same day that Wall Street’s largest banks collectively shed 15,000 jobs in a single quarter earlier this year while posting record profits. JPMorgan itself reported net income of more than $21 billion for the second quarter, up 41 percent from a year ago, boosted significantly by a multibillion-dollar gain on an investment in Visa. Every business line posted record revenue, and investment banking fees rose 30 percent year over year to their highest level since 2021.
