SKN | Ally Financial Trims Headcount by 2% as Banks Weigh AI’s Impact on Jobs

A Second Round of Layoffs Reflects Ongoing Restructuring

Ally Financial has announced another workforce reduction, cutting approximately 2% of its staff in its second round of layoffs this year. The move comes as the Detroit-based digital bank continues to streamline operations and sharpen its focus on core business areas.

“To better align our organizational structure to our more focused, simplified business model, we made the difficult decision to selectively reduce our workforce,” said Ally spokesperson Peter Gilchrist in a statement. Most of the affected roles are at the manager level or higher, with employees receiving full salary and benefits through the end of the year, along with separation packages.

The bank, which employs about 10,000 people, said the decision supports its long-term strategy to improve efficiency and strengthen profitability in a challenging interest rate environment.

Reshaping Strategy: From Mortgages to Core Lending

The layoffs follow a period of major restructuring. Earlier this year, Ally exited its mortgage business and sold its credit card portfolio to CardWorks and Merrick Bank. These moves are part of a broader plan to simplify operations and focus on areas like auto lending, deposits, and digital banking services.

“We remain confident in our long-term strategy and our ability to deliver compelling returns given the strong underlying trends in our core businesses,” Gilchrist told Banking Dive in January. He added that disciplined expense management will remain central to the bank’s strategy.

Ally’s pivot mirrors a wider industry shift, as banks reassess business models amid margin pressure and evolving technology. Rising interest rates, tighter credit conditions, and digital competition are driving many institutions to cut costs and automate operations.

AI Enters the Conversation on Banking Jobs

Ally’s workforce move comes amid broader discussions among large U.S. banks about the role of artificial intelligence (AI) in reshaping employment. At a series of investor events last week, executives from Wells Fargo, Bank of America, and JPMorgan Chase all offered insights into the long-term trend of workforce reduction.

“It’s likely we’ll have less headcount as we look forward,” said Wells Fargo CEO Charlie Scharf, emphasizing that AI will significantly change the way banks operate. “Anyone who says AI won’t lead to less headcount either doesn’t know what they’re talking about or isn’t being totally honest.”

At Bank of America, headcount in the consumer segment has already fallen from 101,000 to 55,000 over the past 15 years. Meanwhile, JPMorgan CEO Jamie Dimon took a more balanced view, noting that while AI will reduce repetitive work, it will also create new jobs. “We always redeploy,” Dimon said.

The consensus: automation and AI are inevitable, but the impact on staffing will depend on how banks integrate technology into their business models.

Banking’s Next Phase: Efficiency and Adaptability

For Ally and its peers, the current wave of job cuts signals a deeper recalibration of the banking workforce. As digital banking expands and AI tools automate back-office and analytical functions, institutions are seeking leaner, more agile structures.

“Headcount is the outcome of conversations about inefficiency,” Scharf noted, reflecting a wider industry sentiment that balancing technology adoption with human expertise will define the next decade of banking.

Closing Insight

As AI and digital innovation accelerate, banks are transitioning toward smaller, more specialized teams focused on strategy, risk management, and customer engagement. The future of work in banking won’t be about headcount—it will be about capability, adaptability, and the value people add in an increasingly automated financial system.

Previous Post SKN | Dive Newsdesk: Kraken’s Compliance, Suspicious Activity Monitoring Evolves