February 27, 2016

BROOKS BROTHERS BETTER START MAKING SABOTS...:

The Robots Are Coming for Wall : Street Hundreds of financial analysts are being replaced with software. What office jobs are next? (NATHANIEL POPPER, FEB. 25, 2016, NY Times Magazine)

I met with Nadler later that day in his own office, across the street from the Goldman building, on the 45th floor of 1 World Trade Center. His dozen or so employees shared a large room decked out in typical start-up style, including an aquarium and large speakers playing electronic music. Nadler has an office off to the side with little more than a large desk, made out of reclaimed telephone poles, and a large upholstered leather chair with matching ottoman. After closing the door, Nadler, who has curly dark hair and pale skin, sat on the ottoman, folded his bare feet under him and told me about the day's feedback from Goldman. This included some tips on what they wanted in the next report, and a good dose of amazement at Kensho's speed. ''People always tell me, 'I used to spend two out of five days a week doing this sort of thing,' or 'I used to have a guy whose job it was to do nothing other than this one thing,'‚ÄČ'' Nadler said.

This might sound like bragging. But Nadler was primarily recounting those reactions as a way of explaining his concern about the impact that start-ups like his are likely to have on the financial industry. Within a decade, he said, between a third and a half of the current employees in finance will lose their jobs to Kensho and other automation software. It began with the lower-paid clerks, many of whom became unnecessary when stock tickers and trading tickets went electronic. It has moved on to research and analysis, as software like Kensho has become capable of parsing enormous data sets far more quickly and reliably than humans ever could. The next ''tranche,'' as Nadler puts it, will come from the employees who deal with clients: Soon, sophisticated interfaces will mean that clients no longer feel they need or even want to work through a human being.

''I'm assuming that the majority of those people over a five-to-10-year horizon are not going to be replaced by other people,'' he said, getting into the flow of his thoughts, which, for Nadler, meant closing his eyes and gesticulating as though he were preaching or playing the piano. ''In 10 years Goldman Sachs will be significantly smaller by head count than it is today.''

Goldman executives are reluctant to discuss the plight of their displaced financial analysts. Several managers I spoke to insisted that Kensho has not yet caused any layoffs, nor is it likely to soon. Nadler had warned me that I would hear something like that. ''When you start talking about automating jobs,'' he said, ''everybody all of a sudden gets really quiet.''

Goldman employees who lose their jobs to machines are not likely to evoke much pity. But it is exactly Goldman's privileged status that makes the threat to its workers so interesting. If jobs can be displaced at Goldman, they can probably be displaced even more quickly at other, less sophisticated companies, within the financial industry as well as without.

Greater productivity was just sound economics until they started coming for the white collar boondoggles....

Posted by at February 27, 2016 9:04 AM

  

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