Yves here. Please comment if you have experienced similar disrespectful comments to employees from managers or management professionals. I remember you, I hated the reframing of “labor” as “human capital” when that first started, IIRC in the 1990s.
By Richard Murphy, Associate Professor of Accounting Practice at Sheffield University Management School and director of Tax Research LLP. It was originally published on Funding the Future
The Financial Times is reporting this morning that Standard Chartered plans to cut more than 7,800 back office jobs by 2030. This reduction will mean that about 15 percent of its employees will lose their jobs. The reason? It deploys artificial intelligence across its global operations.
Chief executive Bill Winters, however, was at pains to stress that this was not really a layoff plan. He told investors:
“It’s not a cost-cutting exercise: it’s replacing, in some cases, low-cost human capital and capital and investment capital that we’re putting in.”
Note that phrase: “low population”.
Bill Winters is referring to real, live, warm-blooded people when he makes that observation. People who are as privileged to be alive right now as he is. People working for his bank in human resources, risk and compliance, and other banking functions in offices in Bengaluru, Shenzhen, and Warsaw. Those people have skills, jobs, and families that depend on their income. And the chief executive of the central bank they work for recently publicly described them to investors as “undervalued workers”.
I am sure this is not a slip of the tongue. It is the language of a very specific worldview. In that worldview, labor is a cost to be minimized, and people are inputs to be valued. If a cheaper alternative is found, you replace it. That’s what textbooks are for. That is what the shareholder expects. And that, it seems, is what Bill Winters believes he is doing. This is neoliberalism writ large for all to see.
There is a brutal honesty to the design that is, in a rare way, to be precise. Most managers reach for the glossary when discussing obsolete systems. They talk about change, investing in the future, reskilling and redistribution. Winters did not. He has stated, quite frankly, that some of his employees are, in his opinion, “undervalued” and that he is replacing those people with financial or technical capital. At least his employees now know where they stand, and by saying most of us, we stand in the CEO’s worldview.
The implication is that labor is now viewed as an inferior form of productive input compared to technology, automation, AI systems, software platforms, robots, data systems, and equipment investments. The idea is that replacing people with big machines naturally improves efficiency. That says everything we need to know about this bank, its managers and the people they want to make money from, most of whom will be “low class people”.
And it is important to note the relevance of the numbers quoted in the article. Standard Chartered employs approximately 80,000 people worldwide. The bank aims to have a net return on equity of more than 15 percent by 2028, rising to around 18 percent by 2030. If so, these jobs don’t work because the bank is struggling. They are leaving because the bank wants to increase its profits to its shareholders. AI technology makes that possible, but more importantly, the ideas of its CEO enable it.
And that’s where the issue becomes economics, and political economy, not just corporate power. If artificial intelligence is now able to displace thousands of skilled workers from financial services, the next question is not whether that is surprising in the literal sense of the word, because, of course, it is. The question is who holds the profit, and who bears the loss?
The answer, meanwhile, is completely predictable. Shareholders benefit. Workers in Bengaluru, Shenzen and Warsaw lost. And governments, in Britain and elsewhere, have nothing to say about it, because there is nothing in the current political framework that requires them to do so. That is because they, too, subscribe to this same neoliberal ideology.
That’s the real story here. The concern is not whether the bank is using AI, or whether it is reducing operations just to increase profits. It is because we have created an economic and political agreement where it is considered normal, completely acceptable, and not at all desirable that a CEO can describe his employees as “the lowest number of human beings” in an investor forum, and no one in the government bats an eye.
The gains from artificial intelligence are built, in no small part, on publicly funded research, publicly educated workers, and publicly maintained infrastructure. They live together by their origins. They are completely independent of their profits. And our governments have decided that we as a society must accept that.
I don’t think I should.
