Deutsche Bank’s chief executive John Cryan has asked colleagues to embrace their “revolutionary spirit” as employees for the bank already working “like robots” begin to be replaced by actual robots. Mr Cryan warned that a “big number” of people working for him will lose their jobs as a result. Accountants who “spend a lot of the time basically being an abacus” will be replaced by automation, he said, risking the ire of the 6,000 finance staff that the bank employs globally.
Germany’s bank has already committed to cutting 9,000 of its 100,000 direct employees and 6,000 of its 30,000 indirectly employed contractors as part of a five-year restructuring plan.
Mr Cryan said further jobs would be cut as the bank embraced new technology. “The truthful answer is we won’t need as many people,” he said. “In our banks we have people behaving like robots doing mechanical things, tomorrow we’re going to have robots behaving like people.”
Once again, the effects of automation are grinding ever upwards.
But also note this (my emphasis added) :
The bank’s technology and operations division also has thousands of contractor employees, despite a major drive by operations boss Kim Hammond to bring key roles in-house and dramatically reduce Deutsche’s sprawling network of contractors. Many of the bank’s finance staff work in the Philippines and India, carrying out manual work such as reconciling figures between legal entities.
One of the competitive advantages enjoyed by countries such as India and the Philippines is relatively cheap labor. I know that both countries are still seeing population growth, something from which, allegedly, many good things flow, but I still can’t help wondering what those newly unemployed accountants (and their equivalents in other sectors) are going to do, and how they will react to to the loss of what will, in most cases, be hard won new status.
And, of course, the job losses are not confined to white collar jobs. In a post last year I noted this:
With robots able to take on more and more manufacturing more and more cheaply China’s labor cost advantage is worth a great deal less. Why should a firm serving advanced markets locate in China, or India, or Vietnam, or…, when it can base production close to the end-consumer in a rich country where the legal, political and physical infrastructure is so much better? As for the implications of all this for the development hopes of those far poorer nations, mainly in Africa, from where so much of the world’s population growth is forecast to be coming? Not great.
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