Barclays to cut 5,000 jobs as AI drives efficiency drive

Barclays announced on Thursday that it will cut around 5,000 jobs as part of an efficiency drive that increasingly relies on artificial intelligence. The bank said about 1,000 of those positions had already been eliminated in the first half of the year. The announcement came alongside its third-quarter earnings update, which showed a 13% rise in net profit to £1.65 billion (€1.97 billion), helped by a 47% surge in equities income.

The job reductions are part of what Barclays described as “organisational simplification and technology change efficiency driven by AI”. Around 60% of the cuts affect support functions, including developers. According to the bank, AI makes staff more productive, reducing the number of people needed to run the business.

Analysts weigh in on AI’s impact

Will Howlett, financial analyst at Quilter Cheviot, noted that the cuts raise the question of “just how significantly AI and automation could reshape the banking industry over the next few years”. He added that banks have invested heavily in technology for years, and are now reaching the point where that investment translates into fewer staff. Howlett said Barclays expects the efficiency measures to deliver more than £1.1 billion (€1.31 billion) in savings.

Barclays chief executive C. S. Venkatakrishnan said the bank “delivered strong equities performance” and expressed satisfaction with operational and financial momentum. Total group income for the quarter rose 3% to £7.37 billion (€8.79 billion). However, Howlett noted that the investment bank was weaker, particularly in fixed income trading, though Barclays remains on track against longer-term targets.

The bank also announced a £500 million (€596 million) share buyback. Russ Mould, investment director at AJ Bell, said the announcement failed to match expectations, with the buyback not entirely easing investors’ disappointment. Mould pointed to two “major clouds over the business”: a widely expected increase in tax on the sector in next week’s UK budget, and a reported probe into possible misrepresentation of risks in its private credit portfolio. The Financial Times reported that the Bank of England is examining claims Barclays understated risks linked to financing for private credit funds. Barclays said its private credit exposure is treated in line with accounting and regulatory capital requirements.