Barclays announced it will cut approximately 5,000 jobs this year as part of its ongoing efforts to integrate artificial intelligence (AI) across its operations and drive cost efficiencies. The planned reductions represent about 5 percent of the bank’s workforce and follow the 1,000 roles already eliminated during the first half of the year. The majority of the cuts—around 60 percent—will affect support functions, including software developers, as AI adoption enables increased productivity.
The British bank’s chief executive, CS Venkatakrishnan, described AI as “the icing on the cake,” emphasizing that technology complements broader transformation efforts rather than being the sole driver. Barclays has invested roughly £307 million in restructuring during the first nine months of the year and expects additional costs of about £300 million by the end of 2026 linked to the overhaul. The bank aims to achieve efficiency savings of at least £1.1 billion in 2027 through this technological shift.
Barclays reported pre-tax profits of £2.3 billion for the third quarter, a 12 percent increase compared to the same period last year, though the figure fell short of analysts’ expectations of £2.4 billion. Revenue rose by 3 percent to £7.4 billion. The investment banking division reported revenues of £3.1 billion, up 1 percent but below forecasts. Within this segment, the fixed income, currencies, and commodities (FICC) business saw a 19 percent decline in income, dropping to £1 billion, which Barclays attributed to a subdued trading environment. Conversely, equities trading experienced a 47 percent surge in revenue, reaching £1 billion.
The UK retail banking division benefited from a sustained high interest rate environment, with its net interest margin slightly improving to 3.69 percent. Pre-tax profits in this segment remained steady at £955 million, better than analysts’ predictions of a decline.
Following the earnings report, Barclays announced a £500 million share buyback to reward shareholders. Despite this, the bank’s shares declined by 2.3 percent to 409.5 pence amid investor concerns over the profit shortfall and the uncertain outlook in certain business areas.
The job cuts come amid a broader trend in the banking sector, with several major UK and international banks accelerating their adoption of AI and undergoing workforce reductions. Standard Chartered, for example, announced plans to eliminate nearly 8,000 roles, mainly in back-office support, citing a similar rationale related to AI-driven efficiencies. HSBC is also reportedly preparing significant cuts in its UK wealth management division.
The moves have prompted criticism from trade unions and others. Sharon Graham, general secretary of the Unite union, accused Barclays of using AI as a justification to discard long-serving employees and called for employers to focus on upgrading workers’ skills to adapt to technological changes. Meanwhile, some industry leaders acknowledge the challenges posed by the transformation. Venkatakrishnan acknowledged the restructuring was the result of sustained technology investments and highlighted the bank’s commitment to balancing operational efficiencies with evolving customer needs.
The Barclays cost-cutting and AI-driven restructuring reflect wider economic and regulatory pressures on banks, including anticipated government tax measures and an increasingly complex risk environment. While AI offers potential gains in productivity and expense reduction, it also raises concerns about the impact on employment within the financial sector.