● Banks Pay-Cut Exits Surge, AI-Driven White-Collar Purge
Did you hear the shocking news that 2,400 bank employees packed up and left, even though severance conditions are much worse than in previous years?
It’s not simply news that ‘the number of bank employees has decreased.’
The content I’m about to explain is the strongest signal showing how the ‘Digital Transformation of the financial sector’ and ‘AI adoption’ are actually changing our jobs.
I’ve summarized everything from why they think it’s a loss if they don’t leave now, why banks are reducing staff despite record-breaking performance, to the real inside story that the news doesn’t tell you, so make sure to read to the end.
Rush to Escape Even with Cut Severance Pay? The Truth Behind the Banking Sector’s ‘Large-scale Exit’
1. The Current State of Mass Resignations: “Conditions are Bad, but the Number of Leavers is Record-Breaking”
The cold wind of layoffs is blowing in the banking sector from the start of the new year.
In just the last two months, a whopping 2,364 people have left the five major commercial banks (Kookmin, Shinhan, Hana, Woori, Nonghyup).
The place with the most departures is Shinhan Bank, where 669 people applied for voluntary retirement, the largest scale since 2020.
With Kookmin Bank at 549 and Nonghyup Bank at 443, it is truly a situation of a continuing ‘Exit procession.’
Here is a truly ironic point.
Usually, isn’t the standard for voluntary retirement to leave when they ‘give you a lot of money’?
But this year, the severance conditions have become much worse than last year.
Last year, they added up to 36 months of salary as special severance pay, but this year it was cut down to 31 months.
Even though five months’ worth of salary is not a small amount, people are actually lining up to leave in greater numbers.
Of course, the money they take with them now is not small. They take an average of 400 to 500 million won, and up to around 1 billion won.
However, the core point is that ‘the psychology to escape has become stronger even though conditions have worsened.’
2. Why Now? The ‘Golden Time for Escape’ Created by Anxiety
Then why on earth do bank employees think it has to be now?
The biggest reason is due to ‘uncertainty about employment retention.’
Among bank employees right now, the perception is widespread that “Did you think current conditions were the bottom? Next year will be worse.”
There is pressure from financial authorities for mutual growth finance, and public opinion on the banking sector’s interest-based profits is very stinging, isn’t it?
Employees instinctively feel that it is difficult for management to provide any more unconventional rewards.
In other words, they have judged that the currently proposed compensation plan is virtually the ‘peak.’
The fear that “If I don’t leave now, I’ll be pushed out later without even getting paid properly” is fueling the retirement procession.
3. The Real Cause Lies Elsewhere: Acceleration of AI Adoption and Non-face-to-face Transactions
This is the part I want to emphasize most today; it’s not just because of money issues.
The fundamental cause lies in the ‘structural change of the financial industry.’
How many people go to bank counters to handle business these days? Almost none, right?
As non-face-to-face transactions have become routine, the need for counter personnel has decreased drastically.
Furthermore, as the adoption of artificial intelligence (AI) accelerates across overall banking operations, algorithms are replacing work done by humans.
From the perspective of bank management, this is a golden opportunity to slim down the organization.
The calculation is to use the money earned from record-breaking performance to organize high-cost manpower and improve their constitution into a digital-centric, light organization.
Talk of a 4.5-day workweek is also coming up, and since idle manpower would increase if that happens, there is also a strategy underlying this to reduce numbers in advance.
4. [Insight] The ‘Crisis of White-Collar Workers’ That News Doesn’t Talk About
Now, from here on, it’s my interpretation that other news outlets don’t cover well.
You shouldn’t view this mass resignation situation in the banking sector simply as the ‘complaints of the well-fed’ bank employees.
This is a signal predicting the ‘end of high-income white-collar jobs’ that the AI era will bring.
In the past, restructuring was something done when a company seemed like it was going to go bankrupt, right?
It’s different now. Banks are cutting people while generating ‘record-breaking performance.’
What this means is that companies are now completing a ‘structure where they can earn money without people, or at least with fewer people (AI & Digital System).’
From the bank’s perspective, they have judged that even if hundreds of billions of won in severance pay go out right now, replacing high-wage manpower with AI and digital systems is a much more profitable business in the long run.
Ultimately, this situation should be seen as the starting point of a trend of ‘preemptive workforce reduction due to AI replacement’ that will spread beyond the financial sector to office jobs in general.
It means it is a time when we must seriously think about what capabilities we need to develop to survive.
< Summary >
- Phenomenon: Even though severance pay conditions have become worse this year (31 months’ worth) than last year (36 months’ worth), about 2,400 people applied for voluntary retirement at the 5 major commercial banks.
- Cause (Employees): The perception that the current compensation conditions are the ‘peak’ and the spread of future employment instability (fear that they will leave receiving even less later).
- Cause (Bank): Reduced need for counter personnel due to increased non-face-to-face transactions and AI adoption. Intention to organize high-cost manpower based on record-breaking performance and switch to a digital organization.
- Key Takeaway: Large-scale layoffs in a surplus situation imply that companies are lowering ‘reliance on manpower’ through digital transformation, and this could spread to a crisis for high-income office workers in general in the future.
[Related Posts…]
- Survival Strategies for Office Workers in the AI Era
- Banks Disappearing? Fintech and the Future of Finance
*Source: 서울경제TV
