‘Developers are the new bankers’: Wells Fargo analysts predict over 100,000 banking jobs to disappear in next five years in the US alone. The biggest reduction in history.

The era of bankers dominating banking is over as software developers rise – and a record wave of job cuts will soon sweep the industry, according to Bloomberg.

That’s according to Wells Fargo & Co. analysts led by Mike Mayo, who estimated that the technology improvements and automation these developers bring will allow the industry to cut 100,000 jobs over the next five years. 

“New job additions could lower reduction levels, but our conclusion is still that this will be the biggest reduction in U.S. bank headcount in history,” Mayo, along with six other senior equity analysts, said in a note to clients late Monday. 

Banks spend more on technology than any other industry and had to set aside a whopping $200 billion for information technology last year alone. That’s meant the technologists they hire play an increasingly important role inside the world’s largest financial institutions, the Wells Fargo analysts found. 

Many of the job cuts will hit lower-paid roles. The financial-services industry – which operates some of the world’s largest call centers – will likely “aggressively” reduce headcount in such locations, the analysts said. Branch workforces may drop 20% over the next several years, and could account for as much as one-third of banks’ total reduction. 

Software developers wield greater influence over lenders’ purchasing decisions and budgets for their tools are ever increasing, the analysts found. That means banks are looking to add technologists and front-line employees to help manage their apps and websites as consumers rapidly adapted to new finance tools during the pandemic.