Barclays plans to cut around 5,000 jobs this year as it leverages technology, including artificial intelligence, to reduce costs, according to Reuters. The planned reductions represent approximately 5% of the bank’s total global workforce.
A thousand positions have already been eliminated. The remaining 4,000 job cuts will take place by the end of the year. The move provides clear evidence of how AI adoption is altering corporate banking headcount.
Support roles will bear the primary impact of the restructuring. Chief Financial Officer Anna Cross stated that around 60% of affected positions are in support functions, such as software development.
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According to the BBC, the bank’s cost reductions are focused on its UK retail bank. But job losses are expected in India, where much of the bank’s UK back-office support is based.
Mixed quarterly results
The British banking giant disclosed the workforce reductions alongside its third-quarter financial results. Its quarterly profit rose 12% year-on-year to £2.3 billion ($3.08 billion). However, total earnings fell short of market expectations due to sluggish fixed income trading.
Barclays’s Chief Executive Officer (CEO) CS Venkatakrishnan expressed disappointment over the trading slump. He blamed a volatile quarter and soft activity in rates and credit products. He assured investors that improving fixed income performance remains an immediate priority.
The lender recorded £201 million in structural cost charges during the third quarter. These actions form part of a long-term strategy to reduce operating expenses through digital technology.
Broader impact of AI
Market analysts noted the broader significance of the strategy. Will Howlett, financial analyst at Quilter Cheviot, told Reuters that the cuts illustrate how AI could reshape the financial industry over the next few years.
Barclays joins major global corporations trimming staff. Technology giant Microsoft and rival bank HSBC have also announced layoffs this year as automation impacts employment across sectors.
Barclays shares slipped 0.1% following the update, outperforming European peers. The shares have fallen 12% so far this year. Shore Capital noted that results were weaker than expected due to the underperformance of the investment bank.
Looming UK budget taxes
The earnings release comes ahead of a key political milestone. Barclays is the first major European lender to report quarterly results this season. However, attention in Britain is rapidly shifting toward the upcoming national budget on October 28.
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British Finance Minister John Healey is preparing his first fiscal budget. Industry leaders fear the government may levy additional taxes on bank profits to fund public policy commitments and manage borrowing costs.
Bank executives have lobbied against additional levies in recent months. Lenders argue that the financial sector already faces heavy taxation. They warn that further taxes could curb domestic lending capacity.