National Australia Bank said it would axe 4,000 jobs — about 12 per cent of its workforce — over the next three years in an effort to automate and simplify its business using new technologies.
The Australian lender announced the job cuts on Thursday as it reported a cash profit after tax of A$6.6bn ($5.1bn) for the 2016-17 financial year — a rise of 2.5 per cent on the previous year. The performance was boosted by growth in home and business lending and stronger markets and treasury income. “As we simplify, we automate processes and things move to digital channels, we will need less people and as that happens we estimate that there will be 6,000 less people needed in three years’ time,” said Andrew Thorburn, NAB chief executive. “Having said that, we’re hiring 2,000 people with different capabilities: data scientists, AI, robotics, automation, technology people, digital people, so the net [loss] will be 4,000 and that’s just a reshaping that’s going to happen.” Shares in NAB fell as much as 3 per cent to A$31.81 in early trading on an otherwise flat ASX. NAB’s job cuts follow a global pattern as lenders introduce new technologies such as artificial intelligence to replace customer support staff and digital channels that eliminate in-branch jobs. In September Vikram Pandit, who ran Citigroup from 2007 to 2012, joined a chorus of industry leaders predicting disruption when he forecast 30 per cent of banking jobs could disappear over the next five years because of technology.
NAB said it would invest an extra A$1.5bn in new technologies and products to the end of 2020 in a bid to boost growth, particularly at its business and private banking units. Mr Thorburn said digitisation, fintech and new global banking players were entering NAB’s market and it needed to adapt, particularly in the face of an uncertain global economy. “I’d rather face into this environment from a position of strength — and we’re in that position today — rather than drift into it or someone else forces us to do it,” he said. NAB said the outlook for Australia and New Zealand economies remained supportive of solid growth. “Some slowing in the housing cycle and a moderation in housing credit is expected, but downside is likely to be limited by strong population growth and low unemployment,” said the bank. The net reduction in employee numbers will cost the bank A$500m-A$800m in the first half of 2018. NAB said it was targeting cost savings of more than A$1bn by the end of 2020. NAB’s net interest margin fell 3 basis points in the 12 months to end September, compared with the same period a year earlier. Net operating revenues grew 2.7 per cent to A$17.89bn. UBS said the result was “solid” but that the bank had flagged higher than expected costs in coming years.
A new report predicts that by 2030, as many as 800 million jobs could be lost worldwide to automation. The study, compiled by the McKinsey Global Institute, says that advances in AI and robotics will have a drastic effect on everyday working lives, comparable to the shift away from agricultural societies during the Industrial Revolution. In the US alone, between 39 and 73 million jobs stand to be automated — making up around a third of the total workforce.
But, the report also states that as in the past, technology will not be a purely destructive force. New jobs will be created; existing roles will be redefined; and workers will have the opportunity to switch careers. The challenge particular to this generation, say the authors, is managing the transition. Income inequality is likely to grow, possibly leading to political instability; and the individuals who need to retrain for new careers won’t be the young, but middle-aged professionals.
The changes won’t hit everyone equally. Only 5 percent of current occupations stand to be completely automated if today’s cutting-edge technology is widely adopted, while in 60 percent of jobs, one-third of activities will be automated. Quoting a US government commission from the 1960s on the same topic, McKinsey’s researchers summarize: “technology destroys jobs, but not work.” As an example, it examines the effect of the personal computer in the US since 1980, finding that the invention led to the creation of 18.5 million new jobs, even when accounting for jobs lost. (The same might not be true of industrial robots, which earlier reports suggest destroy jobs overall.)
As with previous studies on this topic, there’s much to be said for taking a skeptical view. Economic forecasting is not an exact science, and McKinsey’s researchers are keen to stress that their predictions are just that. The figure of 800 million jobs lost worldwide, for example, is only the most extreme of possible scenarios, and the report also suggests a middle estimate of 400 million jobs.
Nevertheless, this study is one of the most comprehensive in recent years, modeling changes in more than 800 occupations, and taking in some 46 countries, accounting for 90 percent of world GDP. Six nations are also analyzed in detail — the US, China, Germany, Japan, India, and Mexico — with these countries representing a range of economic situations and differently organized workforces.
The upcoming worldwide workforce reckoning that artificial intelligence is expected to bring will happen much sooner than many experts predict, the former president of Google China told CNBC on Monday.
Kai-Fu Lee, now chairman and CEO of Sinovation Ventures, believes that about half of all jobs will disappear over the next decade and be replaced with AI and the next generation of robots in the fastest period of disruption in history.
“AI, at the same time, will be a replacement for blue collar and white collar jobs,” said Lee, a renowned Chinese technologist and investor who held positions at Apple and Microsoft in addition to Alphabet’s Google. But white collar jobs will go first, he warned.
“The white collar jobs are easier to take because they’re pure a quantitative analytical process. Reporters, traders, telemarketing, telesales, customer service, [and] analysts, there can all be replaced by a software,” he explained on “Squawk Box.” “To do blue collar, some of work requires hand-eye coordination, things that machines are not yet good enough to do.”
“The white collar jobs are easier to take because they’re pure a quantitative analytical process”
Lee knocked down an argument that the jobs lost will create new ones to service and program AI and robots. “Robots are clearly replacing people jobs. They’re working 24 by 7. They are more efficient. They need some programming. But one programer can program 10,000 robots.”
Besides taking jobs beyond factory floors, robots and AI are already starting to takeover some of the mundane tasks around people’s homes. Lee pointed to the Amazon Echo as an example.
“The robots don’t have to be anthropomorphized. They can just be an appliance,” he said. “The car that has autonomous driving is not going to have a humanoid person [driving]. It’s just going to be without a steering wheel.”
Lee said that while economic growth “will go dramatically up because AI can do so many things so much more faster” than humans, it’ll force everyone to rethink the practical and social impact of fewer jobs. “If a lot of people will find happiness without working, that would be a happy outcome.”
But in a Washington Post op-ed last month, Lee argued against universal basic income, the idea of governments providing a steady stipend to help each citizen make ends meet regardless of need, employment status, or skill level. UBI is being bandied about as a possible solution to an economy that won’t have nearly enough jobs for working-age adults.
“The optimists naively assume that UBI will be a catalyst for people to reinvent themselves professionally,” he wrote. It may work among Silicon Valley and other highly motivated entrepreneurs, he added, “but this most surely will not happen for the masses of displaced workers with obsolete skills, living in regions where job loss is exacerbated by traditional economic downturn.”
Lee sees a different plan of action. “Instead of just redistributing cash and hoping for the best … we need to retrain and adapt so that everyone can find a suitable profession.”
Some of the solutions he offered in his commentary include developing more jobs that require social skills such as social workers, therapists, teachers, and life coaches as well as encouraging people to volunteer and considering paying them.
Lee wrote, “We need to redefine the idea of work ethic for the new workforce paradigm. The importance of a job should not be solely dependent on its economic value but should also be measured by what it adds to society.”
“We should also reassess our notion that longer work hours are the best way to achieve success,” he concluded.
Bankrate’s survey found that younger millennials (ages 18 to 26) are the age group most likely to have a side hustle, with 28 percent saying they have an extra way to make money aside from their main source of income. And they’re not using these gigs to make a quick buck every now and then just to fund their trip to Coachella; 61 percent of younger millennials say they earn extra money on the side every week, and 96 percent of them say they do it at least monthly.
25 PERCENT OF YOUNGER MILLENNIALS MAKE MORE THAN $500 A MONTH.
Income from side gigs isn’t just limited to some loose change from a lemonade stand, either. Millennials are raking in serious cash from these side hustles. The survey found that millennials make a median of $200 monthly from their side jobs, and 25 percent of younger millennials make more than $500 a month.
Looks like we can afford that avocado toast after all.
It makes sense that millennials are hustling harder than other generations; we’ve grown up with social media and the internet, so we’ve got a firm grasp on not only how to properly filter an Instagram post, but how to really grow our green in a gig economy dominated by apps and other on-demand services.
This isn’t just your mama’s Tupperware party.
Hayley Welz, a 24-year-old living in Los Angeles, says she started a side hustle to save more money and to pay off debt. While her primary source of income comes from her role as a business client solutions executive, she also works on the side as an executive consultant for a skincare company. Welz regularly posts on her social media platforms about the brand’s products, leveraging social media to market the skincare products through posts, live events, and video tutorials.
“I use this money (from my side business) for some savings to travel and to help pay off my student loan,” Welz says. “There was zero risk in trying out the business because there is a 60-day empty-bottle money-back guarantee on a business kit to start. If in 60 days I decided I didn’t want to continue the side business, I could get my money back on my initial investment with no penalty. So for me, it was obvious. Why not try it out and give it a chance?”
An extra stream of income could serve as the perfect excuse to spend sporadically … but if you’re smart, it shouldn’t. Resist the urge to splurge! Your money from your side hustle is best stashed in a high-yield savings account, where it can serve as an emergency fund (ICYMI, you should always have between four to seven months’ of expenses in case things don’t go as planned).
If your savings are already in good shape, use that money to pay down debt (helloooo student loans!), or invest it. If you’re living within your means, your primary source of income should take care of all your fixed and fun expenses; everything else should be used to invest in your future self.
World Bank President Jim Kim warns that two-thirds of jobs in developing nations could be wiped out by automation, a situation that could boost conflict and refugee flows.
Kim spoke Thursday in Washington as economic and political leaders from around the world gathered for meetings of the World Bank and the International Monetary Fund.
Kim says it is not clear how fast automation would cut jobs. He says the threat to employment opportunity comes as near-universal access to the internet means people in the poorest nations understand that others have much more comfortable lives. The result, Kim says, is soaring aspirations. Without economic growth and opportunity, those unmet aspirations could lead to frustration, unrest, or more refugees seeking jobs in other nations.
The World Bank president says the issue is urgent because the world already faces serious problems with conflict, climate shock, famine and the worst refugee crisis since World War II.
Kim says the solution is to mobilize trillions of dollars in private capital that currently is earning little or no interest. He says World Bank experts are seeking ways to help commercial lenders make such investments in ways that are less risky and more commercially viable. According to Kim, this is the only way to move with enough force and speed to manage a problem of this size.
In the United States, worries about jobs being lost to computers and automation grow out of the millions of manufacturing jobs lost since 1999. While some politicians blame trade for these employment losses, many economists say most of those jobs vanished because of automation.
While manufacturing jobs proved vulnerable to automation, research shows different results in banking, where the addition of hundreds of thousands of Automated Teller Machines, or ATMs, was accompanied by a slight increase in jobs for humans. Workers who were displaced when robots took over repetitious, tedious work moved to jobs that were less predictable or that required human, emotional connections, such as sales.
Data scientist, DevOps engineer, and data engineer are the best three jobs in America for 2017, according to Glassdoor’s Best Jobs in America list, released late Monday.
This is Glassdoor’s third annual Best Jobs in America report, expanded this year from 25 jobs to 50 jobs. It considers earning potential (median annual salary based on user reports), hiring demand (the number of job openings), and job satisfaction (also based on user reports).
“Tech continues to dominate the list,” said Allison Berry, Glassdoor community expert. Fourteen of the 50 jobs were in the tech industry, including database administrator, UX designer, solutions architect, software engineer, product manager, and mobile developer.
Data scientist took the top spot for the second year in a row, with a median base salary of $110,000 and 4,184 open jobs on Glassdoor.
“One of the big reasons we continue to see such demand for data scientists, product managers, and mobile developers is every company out there is becoming a tech company,” Berry said. “In any industry that has to deal with digitized data, or has an app or an online presence, you need people who can help support all of that and find insights from the data.”
DevOps engineer came in second, with a median base salary of $110,000 and 2,725 job openings on Glassdoor. “DevOps engineer is pretty crucial to the overall engineering team structure—without them, people will have a hard time building, testing, and deploying software,” Berry said. “There’s not a formal career track for becoming a DevOps engineer, but we’re seeing a growth in terms of interest and demand.”
Data engineer rounded out the top three, with 2,599 job openings and a median base salary of $106,000. It’s surprising that data scientist and data engineer were both in the top three, Berry said, since these positions tend to work closely together.
Not all of the tech positions on the list require an engineering degree or formal coding experience, Berry said. She recommends researching each position in your field of interest, and reaching out to people in those positions to learn more about the day-to-day of the job.
For a job title to be considered for the list, it must have received at least 100 salary reports and at least 100 job satisfaction ratings shared by US-based employees in 2016, according to Glassdoor.
Other popular industries represented on the list were healthcare, with seven positions, and finance, with four positions.
What do these fields have in common? “Employees in tech, healthcare, and finance are highly skilled and highly specialized,” Berry said. “These positions are not going to be automated anytime soon.”
Because they are so highly specialized, the employee pool is relatively small compared to the number of job openings, she added—hence, the tech talent shortage. “Anybody looking to go into a great industry where demand, pay, and satisfaction are high, should consider these three industries,” Berry said.
Amazon CEO Jeff Bezos in 2016 revealed his wish to hire 25,000 veterans and military spouses over the next five years, as well as to train 10,000 more in cloud computing skills. On Thursday, the Seattle-based company signed an agreement with the U.S. Department of Labor to move the plan forward with the creation of a registered apprenticeship program.
It’s all part of the Joining Forces initiative set up by Michelle Obama and Jill Biden, and will help ease veterans back into the nation’s workforce.
Those who join the program will take a 16-week technical training program and also get a 12-month paid apprenticeship with the web giant, according to the Seattle Times. It’s hoped that a number of the placements will result in full-time positions with Amazon, though participants would also be able to make use of their new skills at other employers, too.
“Partnerships like this one have reinvigorated our nation’s apprenticeship system, creating opportunity and pathways to prosperity for hundreds of thousands of Americans that will last for years to come,” Deputy U.S. Secretary of Labor Chris Lu said in a release.
Amazon is among more than 200 employers, colleges, and labor organizations that have signed up to the work and training initiative. The company has already hired around 10,000 veterans since 2011, with this latest initiative set to boost that figure markedly.
Bezos first outlined his company’s intention to sign up to the program during a speech at the White House in May 2016.
“We believe this is the right thing to do for our veterans and military spouses, for Amazon, and for our hundreds of millions of customers,” the CEO said, adding that the company was “excited to keep hiring and training these incredible leaders.”