Standard Chartered announced on Tuesday, May 19, that it will cut over 7,000 jobs in the next four years, aiming to replace “low-value human capital” with technology and become one of the first prominent giants in the financial industry to conduct layoffs through the use of artificial intelligence.
The London-based bank has also set higher mid-term profit targets, with the job cuts aimed at helping achieve a goal of increasing average income by about 20% by 2028. Against the backdrop of increasing profitability and facing competition, artificial intelligence (AI) will be the driving force behind streamlining its operations.
The bank stated that by 2030, it will cut 15% of corporate functions (back-office support) positions. According to calculations by Reuters, out of its over 52,000 employees in such functions, more than 7,000 will be affected by the layoffs.
CEO Bill Winters told reporters, “This is not about cost-cutting. In some cases, it’s about replacing low-value human capital with the financial and investment capital we put in.”
Standard Chartered has nearly 82,000 employees worldwide. Winters mentioned that with some employees undergoing retraining, the layoffs will be driven by automation and adoption of AI.
“Therefore, for those looking to acquire new skills and continue development, we are providing opportunities to adjust positions,” Winters said.
The bank has also set a target to achieve a 15% Return on Tangible Equity (ROTE) by 2028, an increase of over three percentage points from 2025, with the target set around 18% by 2030.
“We are investing in capabilities that will strengthen our competitive advantage and drive sustainable growth and higher quality returns over time, while setting clear goals,” Winters stated in outlining the bank’s mid-term objectives.
Jefferies analyst Joseph Dickerson described the new target setting as “somewhat conservative,” expecting “mid-teens” (around 15%) earnings per share growth, with a development path that might exceed guidance expectations.
Dickerson pointed out in the report, “More broadly, given opportunities in its business network, facing a range of unknowns in a broader geopolitical and macroeconomic environment, the company appears able to commit to a revenue growth range of 5% to 7%.”
Jefferies maintains a “buy” rating on Standard Chartered’s London-listed stock with a target price of 2,250 pence (the last closing price was 1,921.50 pence). Its Hong Kong-listed stock rose over 2% in afternoon trading.
Before this announcement, the bank reported a profit growth that exceeded expectations by 17% last month, benefiting from robust contributions from its Wealth Solutions, Global Banking, and Global Markets revenue segments. However, the bank also made provisions of $190 million to offset expected losses related to conflicts in the Middle East.
Standard Chartered has traditionally focused on leveraging the growing trade in the Middle East, Asia, and other markets to drive growth. Most of its income comes from Asia, Africa, and the Middle East, with approximately 6% from the Middle East region.