Swedbank to cut nearly 500 jobs as AI reshapes staffing needs

Swedbank is cutting nearly 500 jobs across its group, including about 100 in the Baltic states, and artificial intelligence could lead to further staffing changes, the bank’s chief executive Olavi Lepp told ERR.

More than 6,000 people work for Swedbank in the Baltics. The bank is offering some employees the chance to move into different roles, but Lepp said this would not suit everyone.

Lepp said the cuts were part of a broader reorganisation of work and development activities. During a period of high profitability several years ago, the bank increased investment in IT development and data modelling. With profitability now at a more normal level, it no longer needs as many employees for that work, he said.

Swedbank is testing artificial intelligence in more than 90 applications across the group. In Estonia, its initial aim is to increase business and market share with the same number of employees, though Lepp said AI could also help reduce costs.

Lepp said future staffing decisions would depend on the cost of AI services, including software licences and tokens, and on whether using them becomes cheaper than employing people for particular tasks. Companies could then cut jobs or retrain employees for different work, he said.

He also questioned whether AI companies would meet investors’ expectations for profitability and said businesses would need customers with incomes to pay for the services they offer.

Swedbank’s net profit in Estonia was 193 million euros in the first nine months of this year, two million euros higher than in the same period last year. Higher benchmark interest rates can increase income from loans, while also raising the bank’s costs for deposits, bonds and other funding.