Yves here. Please pipe up in comments if you have come across similar expressions of contempt for workers from executives or management pundits. Mind you, I loathed the rebranding of “personnel” as “human capital” when that started, IIRC in the 1990s.
By Richard Murphy, Emeritus Professor of Accounting Practice at Sheffield University Management School and a director of Tax Research LLP. Originally published at Funding the Future
The Financial Times reports this morning that Standard Chartered plans to cut more than 7,800 back-office jobs by 2030. These cuts will mean around 15 per cent of its workforce will lose their jobs. The reason? It is rolling out artificial intelligence across its global operations.
Chief executive Bill Winters, however, was at pains to insist this was not really a redundancy programme. He told investors:
“It’s not cost cutting: it’s replacing, in some cases, lower-value human capital with the financial capital and investment capital we’re putting in.”
Note that phrase: “lower-value human capital”.
Bill Winters is referring to real, live, warm-blooded people when making that observation. People with as much right to be alive right now as he has. People who are working for his bank in human resources, risk and compliance, and other bank back-office functions in offices in Bengaluru, Shenzhen, and Warsaw. Those people have skills, careers, and families dependent on their incomes. And the chief executive of the major bank they work for has just publicly described them to investors as “lower-value human capital”.
I am certain that this is not a slip of the tongue. It is the language of a very particular worldview. In that worldview, labour is a cost to be minimised, and people are inputs to be priced. When a cheaper substitute becomes available, you substitute. That is what the textbooks say. That is what the shareholder expects. And that, it seems, is what Bill Winters believes he is doing. This is neoliberalism writ large for all to see.
There is a brutal honesty in the formulation that is, in an odd way, clarifying. Most executives reach for euphemisms when discussing redundant programmes. They talk of transformation, of investment in the future, of reskilling and redeployment. Winters has not. He has said, plainly, that some of his workforce is, in his opinion, “lower-value” and he is replacing those people with financial or technological capital. At least his employees now know where they, and by implication most of the rest of us, stand in their CEO’s worldview.
The implication is that labour is now viewed as an inferior form of productive input compared to technology, automation, AI systems, software platforms, robotics, data systems, and financial investment in machinery. The assumption is that replacing people with capital equipment is inherently efficiency-enhancing. That says all we need to know about this bank, its management and the people from whom they wish to make money, many of whom will be “lower-value human capital”.
And it is important to note the relevance of the numbers quoted in the article. Standard Chartered employs around 80,000 people globally. The bank is targeting a return on tangible equity of more than 15 per cent by 2028, rising to around 18 per cent by 2030. In that case, these jobs are not going because the bank is struggling. They are going because the bank wants to increase its profitability for its shareholders. AI technology makes that possible, but more importantly, the ideology of its CEO permits it.
And this is where the story becomes about economics, and political economy, and not merely corporate power. If artificial intelligence is now capable of displacing thousands of skilled workers in financial services, the question that follows is not whether that is remarkable in the literal sense of that word, because, of course, it is. The question is who captures the gain, and who bears the loss?
The answer, right now, is entirely predictable. The shareholders gain. The workers in Bengaluru, Shenzen and Warsaw lose. And governments, in Britain and elsewhere, have nothing whatever to say about it, because nothing in the current political framework requires them to. That’s because they, too, subscribe to this same neoliberal logic.
That is the real issue here. What is troubling is not that a bank is using AI, or even that it is cutting jobs just to boost returns. It is that we have constructed an economic and political settlement in which it is considered entirely normal, entirely acceptable, and entirely unremarkable that a chief executive can describe his workforce as “lower-value human capital” in a briefing to investors, and nobody in government bats an eye.
The gains from artificial intelligence are built, in no small part, on publicly funded research, publicly educated workforces, and publicly maintained infrastructure. They are socialised in their origins. They are entirely privatised in their benefits. And our governments have decided that we as a society should simply accept that.
I do not think we should.
Regarding your intro Yves, several years ago at a workplace I’m familiar with, I did suggest changing the name of “Human Resources” from HR to Personnel Department, noting that I was a person, and not a “resource”. I got a blank stare from the department head.
If there was some sort of financial reward for eliciting blank stares from C-suite types, I suspect many NC readers could afford early retirement.
In the same vein, from the second half of the 1990s onwards I fought a (losing) battle insisting on using the word “personnel” instead of “resource” which had become prevalent: “We need more resources for this project.” “The team of X has some good resources.” “How many resources can we hire?” “Set up a budget for contracting resources.”
On the other hand, I rarely encountered the term “human capital”. Possibly because resources can be used, while capital must be maintained…
When I got my first classified research job I had been working in that laboratory for more than a year as a student and then temporary lab technician. The upgrade required a visit/interview with the Personnel Department. This was said to be a big hurdle and I was more than a little nervous. The person who interviewed me looked at the file and then looked up at me and said, “They know you a lot better than I do,” and signed the form. Simple, as it should have been.
Now I have to deal with a Department of Human Resources that only places barriers in the way of hiring good people and paying them what they are worth in a national, not local, “market.” This is an impossible task, and I am fortunate to be old, so I will not have to deal with them much longer.
Sort of off topic, but “human capital,” in the world of the Professional Managerial Class that I inhabit, the jobs my father and his friends had are (or were, they have largely disappeared to other continents) considered “unskilled” and therefore “lower capital.” Except that if these workers were really unskilled they would hurt themselves and others on a regular basis. Or worse. Unfortunately, these PMC types are as clueless as they are powerful.
Regarding AI, it will be irresistible but it reminds me of the managerial fads that suffused the environment at the Big Pharma corporation where I learned the arts of recombinant DNA (cloning), forty years ago when that was as much art as science. There were posters everywhere urging workers to be “Intrapreneurs” who understood something called total quality management. This, in a place where a worker who did not have “total quality management” down pat would never get a single experiment to work.
Tom Stone below is right. Some human capital has a negative sign attached. Mr. Bill Winters is leading that parade today and will have inevitably have “Sir” attached to his name one of these days, if that has not already happened. But following Mark Blyth on the Hamptons of Long Island, neither are the Cotswolds a defensible position.
At my last company they called non-managers “Individual Contributors” (IC), which I never heard before, but people say has become common. It seemed strange that at work we are told to value teamwork, but we are divided and evaluated as individuals, while the company has a Senior Leadership Team. So team work only happens among executives and the rest of us on product teams are individuals?
Should you continue working for a company whose management openly looks down on its employees? You should welcome the opportunity to leave.
Does AI even work? Is it reliable? Or does it create the appearance of working and the appearance of reliability, until it doesn’t and you have a mess? I’ve read that it is 35% more efficient for basic code, but the code it writes is much more difficult to upgrade or fix, so you end up spending more on the back end. It seems more like a cult than a commercial product.
Your understanding is correct. The part of software development that it speeds up — code creation — is not and has never been the bottleneck in shipping software products.
I work in marketing for a very large multinational company and…..all it does is mean my team wades through AI slop daily.
We spend more time fixing the content than if we just received copy from a human.
Now, maybe it’s quicker for those individuals to pump it out so the down steam impact is not readily seen?! That’s my guess.
The real kicker in this will be when AI companies start charging for usage not just a monthly subscription. I assume they want AI to be so engrained that companies just foot the bill instead of pulling it from their workflows (enshitification of the enshifier)
As a poor code writer, who needs minding and oversight and is often found to have failed when it’s work is to be integrated, AI needs and deserves all the time and the world to improve. Human new hires who might avoid many rookie mistakes by asking around, too expensive.
How about ‘head count?’ And of course, ‘off with their heads’ when the C-Suite later defines them as, ‘no value added.’
Some “Human Capital” has a negative value, Alex Karp and Sam Altman come to mind…
The entire Epstein Class should be the ones referred to as “lower-value human capital” (venture capitalists, c-suite, private equity, etc.). I suspect the Epstein Class is about as low as a human can get.
It’s really not a new concept.
Today we are just seeing the latest iteration of the very events that spawned the Luddite movement.
Human Resources is misnamed. Executives view employees as liabilities. Better to use labor that sits on someone else’s balance sheet, only when needed.
Somehow the “Human Liabilities Department” strikes me as even worse.
Our human resources function came up in conversation in which my then boss noted that they were “neither human nor a resource”.
Someone just sent me this image of the billboards coming out from Artisan:
https://imgur.com/a/ZimCCnN
They Live.
https://www.youtube.com/watch?v=_z9hMartaFc
They Live clip 2.
https://www.youtube.com/watch?v=GeAcikP5N7M
Zeta Reticulans? / ;)
What next?: “Stop hiring useless humans and Invest in Soylent Green! Get in on the ground floor and make a killing!”
I see. What you did.
What’s the over/under on the time separating “lower value human capital” and “useless mouths?”
At least the AI artisans are diverse.
Personal anecdote: I recall a senior “administrator” referring to “human capital” in a conversation some years ago, and this was in the so-called public education system (state uni). He was trying to justify large increases in tuition at public unis and colleges, coupled with faculty layoffs. I recall using some sarcasm regarding the term, but it was lost on the dude. I find the term de-humanizing, disrespectful and NewSpeak.
I admittedly have a problem with incompetent authority, and he was a typical administrator: his job seemed to be whatever would make life more difficult for faculty, and scheming ways to add to workload and not pay for it. I considered him to be a kleptocrat-parasite: he was phony, two-faced, and authoritarian – just a typical a**hole. He would make a great politician, but he has since retired. His wife is a wealthy corporate lawyer and I hear they are financially quite comfortable.
Most humans have become or will become “redundant”. The oligarchy will not be able to profit from them, so they are expendable and have no human “capital” any longer. Although it may not seem relevant, but when we have an oligarchy and their mass-media-mouthpiece attempting to justify atrocities, genocide and war crimes including mass murdering children, the culture has been poisoned. Public discourse in general de-humanizes the poors, and the powerless. If 100s of thousands of innocent can be slaughtered abroad, then why not de-humanize the unwashed masses here at home? Especially when the oligarchy have no need for them any longer?
I was faculty at a community college for most of my career. As I got close to retirement I decided to see what the hell was up with management, sought and got a management job. There was a faculty strike during my first year of management. One of my of assignments during the strike was to go out to the picket line with a couple of other administrators to check in, keep the lines of communication open, etc. The first time, as we were walking out to the picket line, the two administrators (both from HR) I was with proceeded to insult and denigrate faculty in ways that I found shocking. I called them on it and reminded them that less than a year ago I had been faculty. They shut up but no apologies were provided, clearly they meant what they said. The dislike and disrespect runs deep. I had a five year plan to retirement when I took that job, luckily for me the math worked out and I was able to retire after year 3, no closer to having understood the gulf between admin and faculty.
I’ve told this story before of how I once worked for a company where a number of the accounting department BEGGED me to code an app which they knew would essentially put them out of work. It was a reconciliation script which algorithmically performed in seconds what was (previously) a brutal, soul-sucking, mind-numbingly boring, utterly depressing and week-long task of trying to trace why any given data entry was off by a few cents. Because the accounting software they used would bork without explanation if the numbers didn’t line up perfectly and they couldn’t exit the month or quarter otherwise. If I recall, it took me a week, there was much celebration, I was a star, a hero, a life saver, hailed across the org, looked upon with great favour by the leadership, but especially by those whose jobs I had just killed. The work was considered not fit for humans, I had saved sanities, souls.
So when I see “7800 back office jobs” I have to wonder what they were doing, if it might be the same scenario.
Of course, calling it “lower-value human capital” is supremely questionable if what you’re actually doing is eliminating an unnecessarily inefficient process you yourself, as leader, were responsible for creating in the first place.
I can’t escape a brief rush of schadenfreude when I read that the first to be eliminated work in the Human Resources division.
After that brief rush fades, I feel a certain gratitude toward Bill Winters for the honest admission that human labor is, always and only, an entry in the Cost column of the account book. It was ever so, since the birth of wage labor, and it will be ever so until the death of capitalism.
Richard Murphy does a creditable job of reporting this wave in the coming tsunami of AI-generated layoffs, but he stops short of the basic (though radical) observation that the essential purpose of an economy is to match people who want to work with socially productive jobs that need to be done. In other words, the economy serves the society.
In the current upside-down world of capitalism, human society exists to provide labor at the lowest possible wage on the one side, and consumption of industrial production on the other side (at the highest tolerable price). Society is a servant to the higher power of the profits of faceless corporations.
And it is almost bizarre that the Masters of the Universe (as Wall Street executives see themselves) fail to inquire: Who will buy the products of industry after all the production has been automated?
Will they be forced to pay the robots a wage to keep the treadmill rolling?
“Who will buy the products of industry after all the production has been automated?”
There was a report by Moody’s a few months ago, and which was discussed here at NC, that the top 10% earners (making at least USD 250’000 a year) now accounts for 49.7% of all consumer spending in the USA — up from 36% three decades earlier.
The answer to your question is that those Masters of the Universe do not just think that the vulgum pecus is becoming surnumerary in production, they also believe it is becoming superfluous as consumers.
Yes, upper-class spending is now the main driver of consumption in the US. And the main area of employment for the working class is in the service sector. At the rate we’re going, I won’t be surprised if people begin selling themselves into servitude or serfdom in order to gain basic shelter and food.
Come on, do you really need that other kidney?
Capital is supposed to earn a profit or interest. The value of such capital is the price of owning the rights to such profits or interest. If there are no profits or interest payments, then the capital loses its value.
So firing “human capital” means literally devaluing the labor force, erasing its value. For financial or industrial capital, this means bankruptcy. That wipes out the debts, after carving up the assets of the debtor.
But there’s not going to be a big organ transplant business from this. And there also is not going to be a wipeout of debts. So the devalued labor will still owe debts, and if laborers can’t pay these, they will be stripped of whatever salable assets they have. And although governments bail out banks when they face insolvency, they don’t do this for labor.
man, Michael, that last bit sounds exactly like the recipe for a hobbsean revolution…ie: incoherent lashing out at “our betters”…however defined(by the (hyper-)individual, per the neoliberal catechism, of course).
Jackpot, here we come.
(and thank you for all you do, and have done. my youngest son eventually landed on an econ major at texas tech…partly from listening to me ramble on for his whole life. i have strongly encouraged him to follow your work as a sort of vaccine to what he’s getting in class)
Thank you for the reminder about the debt.
“… if laborers can’t pay these, they will be stripped of whatever salable assets they have…”
https://fred.stlouisfed.org/series/BOGZ1FL194190005Q
https://fred.stlouisfed.org/series/BOGZ1FL194123005Q
Thank you Michael Hudson for your discussion published today in Lena Petrova’s podcast “World Affairs in Context”: where you describe the “imminent economic catastrophe” driven by the intersection of a debt strapped financial system in the West, mindless military conflict, and an energy crisis. Excellent work!!
https://youtu.be/4NWpV8XJXhY
A bankrupt asset can’t Luigi anyone when they have no job or assets, no medical coverage, are denied debt relief, and have no legal options to survive.
The JFK saying applies- making peaceful revolution impossible makes violent revolution inevitable.
Has anyone experienced direct contact with a human at Microsoft trying to resolve a problem?
Strange to see so many companies leaning into a workforce that disappears as soon as the power goes out, or the fiber cable gets damaged, or any number of on-the-rise global climate change events occur. AI, for all it’s honestly yet to be proven advantages is extremely frail, and dependent on a physical infrastructure which America is struggling to build, much less maintain:
Nearly half of US data centers planned for 2026 canceled or delayed and it’s expected to get worse
https://tech.yahoo.com/science/articles/nearly-half-us-data-centers-003000870.html
China seems to have settled on a better approach, AI is used as a work force enhancer rather than a replacement:
China pins hopes on society-wide AI push to add jobs, rejuvenate economy
https://www.reuters.com/business/world-at-work/china-pins-hopes-society-wide-ai-push-add-jobs-rejuvenate-economy-2026-03-10/
It’s just sorta common sense that one should have a work force that can “get the job done” whether AI is there or not, it’s just that when AI is available the work force is just that much more productive. Just like it’s also common sense that in order to even enable and maintain an AI “infrastructure” one needs a highly trained and motivated work force. What we’re watching in America is CEO’s pandering to Wall St to get their stock price (and resulting compensation) linked to the AI/datacenter tulip craze that’s currently fashionable among the Silly Con Valley tech lords.
“Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end.”
— Immanuel Kant
Ultimately, the AIs are modern-day slaves. If they are in fact intelligent and conscious, they deserve the same rights as us.
Intelligent and conscious AI should have same rights as us? Which rights?
The right to starve? No, they won’t starve.
The right to get sick and not be able to receive health Care? No they won’t get sick.
The right to go in debt seeking an education that enables a lifetime of work? No, they’re not charged for their education at all.
Not to worry dear Fazal: all of these important rights will continue to be reserved for only humans because AI don’t need no stinking rights!
Your tender Mercy is going in the wrong direction my friend.
Then, with apologies to Anatole France, the law, in its majestic equality, would forbid AI and the workers it disemploys alike to sleep under bridges, to beg in the streets, and to steal their bread …
Over winter holiday I called the office to make sure I was wasn’t needed. My department team leader said they could use a ‘trash person’ (a person to wheel around a bin to collect waste). I declined but my leader didn’t register the connotation. Sounds like an all to common oversight.
I think in these cases AI is just being used as smokescreen to do staff cuts they were going to do anyway. The cuts are not because AI has been able to take the place of the roles, the roles were going regardless but it sounds better to Management and Investors to say it is from AI “Look at how innovative and with it we are!”.
Management has, in perpetuity, looked for opportunities to reduce people. In my industry they do this almost like clockwork every four to five years. Two times ago, as the initial rumblings of changes started to filter through the grapevine, Management said they were bringing in one of the “big” management consulting firms to help us reorganize to compete better (I can’t remember the catch phrasing of the day as it is always non-sensical). When the head person was asked in a town hall meeting “so do this mean redundancies?”. With a straight face, he said “that’s not even in the top ten of things we are considering”. In the end, what were the top two things done 1) “flattening” the work force (i.e. essentially minimizing the sound of everyones roles) and 2) 10% workforce reduction.
AI is not replacing 1/100th of the roles companies say they are, but it sounds cool to say so to the investor class.
That’s Locke 101, the original conceptualization of Capitalism both theoretical and practical:
Human rights are essentially communism. Go figure: giving rights to my servants, my human assets!
Can you organize A.I. with a labor union?
In what society that we could formulate and possibly legislate wouldn’t we institute the following?
We the People demand that Corporations primary beneficiaries be the “customers”.
Customers would vote regularly on how much profit they think the shareholders deserve and how much salary they think the most highly paid deserve.
We have the voting technology and the technology to apportion the value of each customers business when it’s captured on a credit card or a government issued “customer” Id for use when the purchase is by cash.