Barclays will cut 5,000 jobs, about 5% of its workforce, as it spends more on artificial intelligence (AI) to cut costs.
The UK bank has already removed about 1,000 roles and aims to complete the rest by the end of the year, according to Sky News.
Most of the losses will be in the bank’s home market. Operational and functional roles will take the biggest hit, though staff in other countries will also be affected. Barclays employs about 100,000 people worldwide.
Group Chief Executive CS Venkatakrishnan said the cuts follow years of spending on technology. “Investments which we’ve made into technology over a number of years and which we continue to make,” he said were behind the decision.
AI’s Role in the Cuts
Venkatakrishnan said AI matters but is not the whole story. “AI has an important role to play and may have a more important role to play in the future,” he said.
“I’ve often said that it is the icing on the cake – it’s not the cake – because you need to do the infrastructure build to get the benefits of AI. Where the infrastructure is modern, we’ve been applying it here.”
The bank is not alone. Standard Chartered’s head said in the spring that it needed to replace “lower-value human capital” while announcing thousands of job losses.
Across finance, firms are using AI to handle back-office work such as software development.
A Barclays spokesperson said the bank is preparing for the future.
“We are positioning Barclays for the future, building the workforce and skills needed to deliver our strategy and meet the evolving needs of our customers and clients,” the spokesperson said.
“In doing so we are committed to helping our colleagues develop and build rewarding careers, while meeting the changing needs of customers and clients and ensuring Barclays continues to succeed in the years ahead.”
Profits Miss Forecasts
The job news came as Barclays reported third-quarter profits of £2.3bn, up 12% on the same period last year.
However, the figure fell short of analysts’ forecasts, partly due to weak fixed-income trading. Barclays shares fell by more than 2.5% after the results.
The bank has cut costs for years to lift returns. It has also faced pressure to show that its technology spending is paying off.
The latest cuts suggest it sees AI and automation as a way to shrink back-office roles while keeping customer-facing services.
Unions and staff groups are likely to seek details on which roles will go and how the bank will support those affected. Barclays says it will help staff develop new skills
The bank has not said exactly where the cuts will fall or how many countries will be affected. It also has not given a full timeline beyond the end of the year.
For customers, the bank says services will not change. For staff, the next few months will bring uncertainty as the bank reshapes its teams around technology.
The wider finance industry is watching closely. If Barclays meets its target without disruption, other banks may follow with similar cuts.
