Fired Goldman Sachs Workers Won’t Find Jobs–AI Diary

Goldman Sachs Group Inc. (NYSE: GS | GS Price Prediction) has made it plain that it will start to cull its workforce based on the ability of some artificial intelligence (AI) programs to do what humans do better than humans.

However, the AI-based decisions are not entirely about AI advantages. The bank has always been known for ruthless management. It has asked executives to find “underperformers.” This could affect about 1,000 people this year. It is unclear whether job additions will offset some of these on the Goldman payroll.

A memo obtained by the media showed, however, that the Goldman decision was not just about poor performance among certain workers. “The rapidly accelerating advancements in AI can unlock significant productivity gains for us,” a management memo read.

Many of the people who lose jobs to AI will not get those jobs back, at Goldman, or anywhere else in the industry. The AI contribution to investment banking cost cuts is permanent, particularly in several categories.

The Jobs Lost

The most expensive jobs to be replaced are those of analysts who have recently graduated, usually from business schools. In their first two or three years, these people work extraordinarily long hours. Their reward is pay packages in the low hundreds of thousands of dollars. Their primary job is analysis of huge amounts of data, to find key edges in trading methods, corporate performance, and patterns for macroeconomic investments. AI software can often do this more quickly and with a higher level of accuracy. This movement is sweeping Wall Street, so these people do not have anywhere else to go.

Bots are already replacing back-office jobs at investment banks. Many of these are data processing jobs. According to Financial News, HSBC is among the early adopters of this use of AI software.

Ironically, among the most immediate positions due to be hammered by AI replacement is human resources. Tech companies have shown banks and other industries how HR departments can be less human-dependent. Amazon has laid off about 15% of its HR employees. Many other large companies can use the same playbook.

The truth is that AI destroys jobs. There is a theory that it also creates them. However, the jobs lost at Goldman Sachs are not the only destroyed jobs. They are common across the entire industry.

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