The impact of artificial intelligence will change hiring and career progression within financial services, according to a report from financial services compensation consultant Johnson Associates. The report notes that the employment market is bifurcating, with people possessing AI skills commanding higher compensation.
At the same time, employers are reducing their analyst-to-manager ratios and expecting AI to perform more of the basic work typically done by analysts, resulting in traditional work models eroding quickly. The report finds that the adoption of AI could lead to widening pay and career gaps for early career employees.
“I think the untold story is, what does [AI-driven change] do to career hierarchies and career progression,” says Alan Johnson, founder of Johnson Associates. “I don’t think anyone knows.” Johnson notes that junior or mid-level employees that retain their positions during this period of job cuts will likely be paid more on average because there will be fewer people working that could reach their experience and skill levels.
Junior employees will likely have different tasks, and the talent pipeline will shrink as a result, placing more value on remaining employees. Johnson Associates projected in 2025 that AI integration into financial services companies’ workflows would lead to at least a 10% to 15% headcount reduction over the next two or three years.
“We used to start with a class of 10 people, and one of [them] made managing director. We kind of knew how long that would take and people would leave voluntarily,” Johnson says. “[Because of AI] we’re going to start with five, and how many are going to make director, … [or] managing director? How many are going to make partner? How long is that going to take? I don’t think anyone has really figured that out.”
Several banks and asset managers have announced waves of job cuts. BNP Paribas announced plans in January to cut 1,200 positions, or around 20% of staffers within its asset management business, following the firm’s acquisition of AXA Investment Management.
Wall Street banks cut 5,000 jobs in the first quarter of 2026, according to data from Bloomberg. In early 2026, Goldman Sachs Asset Management announced that it would aim to cut up to 5% of its workforce gradually.
Speaking on the firm’s first quarter earnings call on April 15, Bank of America CEO Brian Moynihan noted that the bank was able to cut 1,000 jobs “from eliminating work and applying technology and consumer and commercial customers using those technologies.”
Tags: AI