Singapore's largest financial institution, DBS Bank, has announced plans to reduce its workforce by approximately 4,000 positions over the next three years, as artificial intelligence increasingly takes over tasks previously performed by human employees.

A bank representative informed the BBC that this downsizing will primarily occur through natural turnover, with temporary and contract positions gradually phasing out as their terms conclude.

The spokesperson emphasized that the bank's permanent employees are not anticipated to face layoffs as part of this restructuring.

Piyush Gupta, the outgoing CEO of DBS, revealed that alongside these cuts, the bank intends to introduce roughly 1,000 new positions focused on AI development and implementation.

This move positions DBS as a pioneer among major global banks in providing a clear outline of how AI integration will reshape its operational landscape.

While the bank did not specify the exact locations or job functions targeted for reduction, it currently employs a temporary and contract workforce ranging from 8,000 to 9,000 individuals, out of a total staff of about 41,000.

Gupta, who will step down from his role at the end of March, to be succeeded by deputy CEO Tan Su Shan, highlighted the bank's long-standing investment in AI, noting that it has been leveraging the technology for more than 10 years.

"Currently, we utilize over 800 AI models across 350 different applications," Gupta stated, projecting that these initiatives will generate an economic benefit surpassing S$1 billion (approximately $745 million or £592 million) in 2025 alone.

The broader adoption of AI across industries has sparked intense discussion about its implications. A 2024 report from the International Monetary Fund (IMF) estimated that AI could impact nearly 40% of jobs globally.

IMF Managing Director Kristalina Georgieva cautioned that, in many cases, AI might exacerbate economic inequality.

Meanwhile, Bank of England Governor Andrew Bailey offered a more optimistic view in a BBC interview last year, suggesting that AI is unlikely to obliterate jobs on a massive scale.

Instead, he argued that workers would adapt to collaborate with these advanced tools, acknowledging both the risks and the significant opportunities AI presents.

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