Europe’s major banks are facing a tough efficiency program because investors are increasingly comparing cost ratios and profitability. Furthermore, digital processes are now scaling faster than traditional branch models. Morgan Stanley therefore expects significant staff reductions. Artificial intelligence and branch closures are also intended to serve as levers for increased productivity. (ft: 31.12.25)
Morgan Stanley predicts roughly ten percent fewer jobs
Morgan Stanley has examined 35 major European banks. The firm concludes that around ten percent of jobs could be lost by 2030. This would affect more than 200,000 jobs, as the institutions studied employ approximately 2.12 million people. Based on this, Morgan Stanley derives a scenario of roughly 212,000 potentially eliminated positions, provided the institutions consistently implement AI-driven transformations.
Morgan Stanley sees a dual driver at play here: banks are automating internal processes while simultaneously reducing the number of branches. Many processes are migrating to apps and portals, and AI models are taking over checks, reconciliations, and documentation that previously tied up large teams. Morgan Stanley estimates the efficiency potential of “AI and further digitalization” at up to 30 percent. This further increases cost pressures on personnel.
Which areas does Morgan Stanley see as particularly at risk?
Morgan Stanley expects the most significant cutbacks in areas with less customer contact, because recurring tasks can be more easily standardized there. Central services, back-office and middle-office functions, as well as risk management and compliance, are particularly affected, because data verification, reporting, and regulatory controls can increasingly be mapped as software processes. Morgan Stanley argues that AI can perform these tasks faster and more consistently, while banks simultaneously streamline their internal control chains.
Furthermore, Morgan Stanley points out that the transformation will vary depending on the market, because cost structures and branch density differ considerably. Countries like France and Germany are considered particularly sensitive in the analysis because high cost ratios increase the pressure to reduce the largest expenditure item, which in many institutions remains personnel. Morgan Stanley links this situation to the trend toward digitalization in retail banking, which is having a significant impact.
ABN Amro and Société Générale set the first markers
Part of this development is already concrete, and individual institutions are announcing clear targets. ABN Amro plans to eliminate around 20 percent of its full-time positions by 2028, thus providing an example of the scale that other institutions are also considering. At Société Générale, CEO Slawomir Krupa articulated the strategy particularly clearly, declaring: “Nothing is sacred.” Morgan Stanley interprets such statements as a signal that the cuts will not only affect individual teams but potentially every function.
For many banks, this represents a delicate balancing act, because savings need to be visible quickly, but expertise cannot be replaced at will. When AI takes over audits and documentation, responsibilities must remain clear, and risk models still require human oversight. Morgan Stanley therefore describes the transformation less as a short-term cost-cutting measure and more as a structural shift in activities away from routine work and towards management, quality assurance, and technological expertise.
Critics warn of knowledge gaps
In addition to cost-cutting targets, risks are also coming to the fore, because excessive automation can change banking training. A JPMorgan representative warned the Financial Times that a generation of bankers could emerge who have never acquired fundamental expertise if AI displaces foundational work early on. The problem affects not only career paths but also the stability of control functions, because experience under pressure counts, not just speed in normal operations. While Morgan Stanley presents the cost argument, the industry must simultaneously address the issue of skills.
This trend is also evident in the US, where major banks are also relying on AI-driven process chains. TechCrunch, citing the Financial Times, reports that Goldman Sachs has announced a hiring freeze until the end of 2025 and rolled out the “OneGS 3.0” program, which makes greater use of AI from onboarding to regulatory reporting. This underscores that Morgan Stanley is not just describing a European snapshot, but a transatlantic transformation that is changing costs, processes, and job profiles simultaneously.