AI Job Cuts, Hybrid Work Shifts and Fintech Market Moves

The UK’s early warnings on AI and jobs

Is the UK the canary in the AI coalmine? A Morgan Stanley report suggests that the UK is experiencing several contradictory trends: AI is driving productivity in many companies, but replacing entry level jobs that are traditional steps into the workplace. “British companies reported that AI led to 8% net job losses over the past 12 months, the study shared with Bloomberg shows. It was the highest level in a group that included German, American, Japanese and Australian firms, and twice the international average.

UK companies saw an average 11.5% productivity increase thanks to AI, with almost half reporting even greater boosts. But their US counterparts, which reported virtually the same productivity gains, created more jobs than they slashed due to AI. In the UK, the AI revolution comes just as employers are struggling with payroll costs, slow growth and greater political instability. Employers surveyed by Morgan Stanley for the report said they were most likely to cut early-career jobs requiring two to five years of experience in the UK.”

London mayor Sadiq Khan said last week that the city was “at the sharpest edge of change” because of its reliance on white-collar workers in the finance and creative industries, and professional services such as law, accounting, consulting and marketing. And last week Jamie Dimon told a Davos audience that governments and businesses would have to step in to help people
whose jobs had been displaced by AI. Dimon gave the example of the layoff of 2 million US truckers earning six-figure salaries whose jobs are at risk from self-driving trucks, potentially triggering social unrest.

Three days hybrid is the new normal

Is hybrid the new normal? Nubank is set to invest £475 million in office space as it looks to move staff to a regime of two- to three-days a week in the office. “The change will end Nubank’s current policy that lets employees spend 93% of their work time in remote setups. It was established during the Covid 19 pandemic and hasn’t changed since, even as Nu’s employee count expanded to 9,500 in September, according to the company.

The policy shift brings the fintech more in-line with Brazilian banks, which are also keeping workers in hybrid setups that allow two
or three days from home a week,” writes Bloomberg. “The amount of office days still contrasts with the push by many US banks to bring staff back to the office five days a week.” The change will be gradual, moving to two days a week by midyear and three days by the start of next year.

Tethered to gold

Once criticised for its opaque assets, the stablecoin business Tether has since moved into backing its stablecoin Tether with more traditional assets. And while bitcoin – the volatile original cryptocurrency whose price volatility Tether was designed to ease – has been sinking in the last months, gold has been on a hot streak. And Tether has been a huge beneficiary, earning about $5 billion on its gold holdings.

“The price of gold at the end of September was $3,858 per troy ounce but has since soared to more than $5,200 as investors pile into the haven asset in the face of rising geopolitical uncertainty — meaning Tether has made a gain of more than $5bn on those holdings,” the FT reports. “The company said this week that it bought a further 27 tonnes of bullion in the fourth quarter of last year for its gold-backed stablecoin, which has risen in value by at least $700mn this year. Tether’s overall gold holdings are now worth about $24bn, making it one of the world’s biggest beneficiaries of the storming gold rally.”

Revolut’s Mexican launch

The original fintech-to-bank, Revolut, launches its Mexican bank this week with a 13% interest rate on deposits to tempt new customers. “The London-based digital bank has deployed $100 million of capital as part of its goal of reaching two million clients by the end of the year, Juan Guerra, Revolut’s local head said at an event in Mexico City on Tuesday,” reports Bloomberg.

Mexico is getting a wave of new digital banks including Plata and Nubank, which will be looking for highly-prized salaried customers,
many of which will be looking with interest at Revolut’s new offering, which applies to the first 25,000 pesos. The bank will also be targeting the lucrative US-Mexico remittance corridor, which has gone increasingly digital. Have
established banks been taking their customers for granted? We’ll soon find out.