DBS Group Holdings plans to cut about 4,000 of its contract and temporary staff workforce over the next three years as artificial intelligence increasingly takes on roles carried out by human beings.
South-east Asia’s largest lender has approximately 8,000 to 9,000 of such staff, according to chief executive officer Piyush Gupta replying to a query from Bloomberg News. He confirmed a Press Trust of India news agency report which said the bank will trim its workforce following further adoption of AI across its business.
Permanent staff will not be affected, the outgoing CEO said. DBS has around 41,000 staff and Tan Su Shan, currently deputy CEO, will succeed Gupta on Mar 28.
A DBS spokesperson said: “The reduction in workforce will come from natural attrition as temp and contract roles roll off over the next few years.”
My current projection in the next three years, we’ll shrink our workforce by about 4,000 or 10%,” Gupta said at an industry conference in Mumbai. The outgoing CEO, however, said 1,000 new positions will be added in AI.
Gupta is among the first major banking chiefs to lay out details of possible job losses due to AI.
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“In my 15 years of being a CEO, for the first time, I’m struggling to create jobs. So far, I’ve always had a line of sight to what jobs I can create. This time I’m struggling to say how will I repurpose people to create jobs,” Gupta added.
Global banks will cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, said a Bloomberg Intelligence report last month.
Chief information and technology officers surveyed for BI indicated that on average they expect a net 3 per cent of their workforce to be cut, according to the report.
Still, many firms have stressed that the shift will result in roles being changed by technology, rather than replaced altogether. Teresa Heitsenrether, who oversees JPMorgan Chase’s AI efforts, said in November that the bank’s adoption of generative AI was so far augmenting jobs.
In its latest results announcement, DBS said net profit for the fourth quarter rose 11 per cent from a year ago. Net profit for the three months ended Dec 31, 2024, was S$2.52 billion, compared with S$2.27 billion previously, and was slightly short of expectations.
Excluding one-off items – a S$100 million corporate social responsibility commitment to DBS Foundation and other charitable causes – Q4 net profit would have been up 10 per cent at S$2.62 billion.
Following the results, analysts raised target prices and dividend estimates on DBS, predicting higher valuation ahead.
Maybank said DBS was giving significant visibility on capital returns. While earnings could grow at just 1 per cent compound annual growth rate between FY2025 and FY2027, dividends could expand at 7 per cent, delivering yields higher than 6.5 per cent, it said.
It upgraded its estimate for dividend per share (DPS) by 14 to 22 per cent between FY2025 and FY2027.
RHB added that one key highlight was DBS’ management providing clarity on the quantum of excess capital of S$8 billion, and reaffirming its commitment to return this to shareholders over the next three years.
That will start with a capital return dividend of S$0.15 per share per quarter for FY2025 that DBS announced on Monday.
That is over and above its earlier share buyback programme and a S$0.24 increase in ordinary DPS this year, RHB noted. After factoring in the capital return dividend, RHB’s estimate for its FY2025 DPS is S$3.06, from S$2.46. BLOOMBERG, REUTERS
