Barclays plans to cut around 5,000 jobs, or 5% of its workforce, by the end of 2026 as the British lender increases its use of technology, including artificial intelligence (AI), to reduce costs and improve returns.
The bank has already eliminated around 1,000 positions, with the remaining cuts expected by the end of the year, Chief Financial Officer Anna Cross told reporters, according to Reuters. Around 60% of the planned reductions will affect support functions, including software developers.
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The announcement comes as financial institutions worldwide reassess staffing requirements amid growing investments in automation and AI.
BARCLAYS PROFIT RISES, BUT MISSES ESTIMATES
Barclays reported third-quarter profit of £2.3 billion (about Rs 29,200 crore), up 12% from a year earlier but below analysts’ expectations. The bank’s investment banking division faced pressure from weaker fixed-income trading performance.
Commenting on the performance of the bank’s fixed-income trading business, Chief Executive Officer C.S. Venkatakrishnan said he was disappointed with the results.
“I am disappointed, and you can be sure this will get my attention,” Venkatakrishnan said. He attributed the weaker performance to a volatile quarter, particularly in rates and credit products.
The bank said it had taken a further £201 million (about Rs 2,550 crore) in structural cost actions during the third quarter as part of its longer-term effort to reduce expenses, including staff costs, through greater use of technology.
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SUPPORT FUNCTIONS TO BEAR THE BRUNT OF CUTS
Around 60% of the planned job reductions will affect support functions, including developers, Cross told reporters.
The announcement highlights how technology investments are influencing workforce decisions in the banking sector. Banks are increasingly exploring automation to streamline operations, although the extent to which AI is directly responsible for individual job cuts varies by company.
“The cuts illustrate just how significantly AI and automation could reshape the banking industry over the next few years,” Will Howlett, a financial analyst at fund management business Quilter Cheviot, said, according to Reuters.
Companies worldwide, including Microsoft and HSBC, have also announced job cuts this year amid wider efforts to control costs and adapt to technological changes.
Investment banking performance remains mixed
Barclays’ investment bank reported third-quarter income of £3.1 billion (about Rs 39,400 crore), below analysts’ £3.3 billion (about Rs 41,900 crore) forecast. Fixed-income trading income fell 19% to £1 billion, while equities revenue rose 47%, according to Reuters’ calculations.
Shore Capital also flagged disappointing investment bank performance. Barclays shares slipped 0.1% after the results and are down around 12% so far this year.
UK BUDGET ADDS PRESSURE ON BANKS
The results come ahead of Britain’s budget on October 28, when the government could consider additional taxes on banks.
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Finance Minister John Healey has not ruled out increasing taxes on banks’ profits, despite lobbying by the industry. Banks have argued that they already face relatively high taxation and that additional levies could constrain lending.
The budget debate adds another challenge for lenders already seeking to manage costs, improve returns and invest in technology.
(With Reuters inputs)
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