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DBS, Singapore’s largest bank, has announced plans to cut 4,000 jobs over the next three years as artificial intelligence (AI) takes over tasks currently handled by humans. This decision marks a significant shift in the banking industry, as AI continues to automate more processes. DBS is among the first major banks to publicly reveal how AI will impact its workforce.

The job reductions will happen through natural attrition, meaning the bank will not renew temporary or contract positions once they end. A spokesperson for DBS clarified that permanent staff will not be affected. The bank also plans to create around 1,000 new roles focused on AI development, ensuring that technology remains at the core of its growth strategy.

DBS Workforce Adjustments and AI Expansion

DBS has not provided a breakdown of how many positions will be cut in Singapore or which roles will be impacted. Currently, the bank employs about 41,000 people, including 8,000 to 9,000 temporary and contract workers. The planned job cuts represent nearly 10% of the total workforce.

Outgoing chief executive Piyush Gupta emphasized that AI is transforming the financial sector. He noted that DBS has been building AI capabilities for over a decade. The bank now operates more than 800 AI models across 350 applications, streamlining services and improving customer interactions.

By 2025, DBS expects these AI models to generate over S$1 billion ($745 million; £592 million) in economic benefits. This growth highlights the bank’s confidence in AI’s ability to drive efficiency and profitability.

As Mr. Gupta prepares to step down at the end of March, deputy chief executive Tan Su Shan will take over as CEO. She is expected to continue expanding DBS’s AI strategy while managing workforce transitions.

AI’s Impact on Jobs and the Global Economy

The increasing use of AI in banking and other industries has sparked discussions on its benefits and challenges. Many experts believe AI can improve efficiency, reduce costs, and enhance customer service. However, concerns remain about job losses and economic inequality.

In 2024, the International Monetary Fund (IMF) warned that AI could affect nearly 40% of jobs worldwide. Managing director Kristalina Georgieva pointed out that while AI creates new opportunities, it could also widen income gaps. Workers in lower-skilled positions are at greater risk of displacement, which could lead to economic instability in some regions.

Despite these concerns, some industry leaders remain optimistic. Bank of England Governor Andrew Bailey argued that AI is not a “mass destroyer of jobs.” He believes that workers will adapt by learning new skills, just as they have in previous technological revolutions. While he acknowledged AI’s risks, he stressed its potential to boost productivity and innovation.

DBS and the Future of AI in Banking

DBS’s decision to cut jobs while expanding AI investment reflects a broader trend in the financial sector. Many banks are turning to AI to improve security, speed up transactions, and personalize customer experiences. AI-powered chatbots, fraud detection systems, and automated trading platforms are becoming standard in the industry.

Other major banks, including JPMorgan Chase and HSBC, are also increasing AI adoption. JPMorgan recently announced plans to invest billions in AI-driven financial services, while HSBC is exploring AI applications for risk management and customer support.

DBS remains committed to balancing AI’s growth with employee support. By gradually phasing out temporary roles instead of conducting mass layoffs, the bank aims to minimize disruptions. Additionally, its plan to create 1,000 new AI-related jobs could provide new career paths for skilled professionals.

A Shift in the Banking Landscape

The rise of AI is transforming the global banking industry. While automation can improve efficiency and reduce costs, it also presents challenges for workers. DBS’s announcement signals a shift toward AI-driven banking, with other institutions likely to follow.

As DBS moves forward with its AI strategy, the impact on employees and the broader economy will be closely watched. Will AI create more opportunities than it replaces? How will financial institutions balance automation with human employment?

For ongoing updates on AI’s role in banking and finance, visit Financial Mirror.