Morgan Stanley analysts have warned that the rise of AI adoption and further physical branch closures could drive more than 200,000 job losses in the European banking sector over the next four years.

Based on an analysis of 35 lenders, the bank's analysts explained that the sector could axe 10 per cent of roles by 2030, with most of the cuts coming from central services divisions, including back and middle office roles, as well as risk management and compliance positions, the Financial Times reported this week.

The banks in the analysis employ around 2.12 million staff, meaning that roughly 212,000 jobs are predicted to be lost.

“Many banks have quoted efficiency gains coming from AI and further digitalisation to the tune of 30 per cent,” said the bank.

The figures come after Dutch bank ABN Amro recently announced plans to cut 5,200 full-time roles by 2028 as part of cost-saving measures.

The plans mean that nearly a quarter of the Dutch lender's 22,000 staff will be axed over the next three years.

Chief executive Marguerite Bérard, who joined the bank in April, announced the move as part of its wider strategy for 2026-2028 at its Capital Markets Day in November.

The organisation expects around half of the cuts to take place through attrition.

In September 2025, Lloyds Banking Group said it was preparing to put approximately 3,000 employees at risk of dismissal as part of a performance management overhaul led by chief executive Charlie Nunn.

Under the plans, managers were instructed to rank staff performance, with those deemed underperforming to be placed on structured support plans that could ultimately lead to dismissal.

Around 1,500 of those placed on performance improvement plans are expected to lose their jobs if they fail to meet the required standards.

The move comes as the bank addresses unusually low staff turnover rates, with fewer than five per cent of employees leaving annually compared to the historical average of 15 per cent.

The initiative forms part of Nunn's final year implementing his five-year strategic plan, which aims to diversify income streams, encourage digital banking adoption, and streamline the business structure.

In August last year, company filings and people familiar with the process revealed that UBS was falling behind its own plan to shrink its workforce to 85,000 by the end of the Credit Suisse integration in 2026.

Figures submitted to regulators show the Swiss lender employed just over 105,000 staff at the end of June, only 1,300 fewer than three months earlier and well above the target implied by its internal timetable.

The bank has eliminated about 14,000 positions since swallowing its rival in a state-brokered rescue in March 2023, but the pace of cuts slowed to an average of 1,300 roles per quarter in 2025.

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