Barclays has announced plans to reduce its global workforce by approximately 5,000 roles by the end of 2026, a move the British lender says is driven by the adoption of artificial intelligence and other technologies to streamline operations. The announcement, made alongside its third-quarter earnings on Thursday, sent shares slightly lower in London, despite a 13% rise in net profit.
The job cuts, which represent about 5% of the bank's total staff, include around 1,000 positions already eliminated in the first half of the year. In its earnings presentation, Barclays cited “organisational simplification and technology change efficiency driven by AI” as key factors behind the restructuring. Roughly 60% of the affected roles are in support functions, including developers, as AI tools make employees more productive.
AI's growing impact on banking jobs
Will Howlett, a financial analyst at Quilter Cheviot, said the announcement illustrates “just how significantly AI and automation could reshape the banking industry over the next few years.” He noted that while banks have invested heavily in technology for years, “we are increasingly reaching the point where that investment translates into fewer people being required to run the business.”
Barclays expects its efficiency measures to deliver more than £1.1 billion (€1.31 billion) in annual savings, which should help reduce costs and improve profitability. The bank's profit attributable to shareholders rose to £1.65 billion (€1.97 billion) in the third quarter, up from £1.46 billion (€1.74 billion) in the same period last year.
Chief Executive C. S. Venkatakrishnan expressed satisfaction with the bank's operational and financial momentum, highlighting the investment bank's “strong equities performance.” Income from equities jumped 47% year-on-year, while total group income for the quarter climbed 3% to £7.37 billion (€8.79 billion).
However, the broader picture was mixed. “The investment bank was weaker, particularly in fixed income trading, but Barclays remains on track against its longer-term targets,” Howlett said. He added that “the question is increasingly whether Barclays can turn technological investment and a smaller workforce into sustainably lower costs without compromising growth.” If it can, he said, “there is still considerable scope for improved returns.”
The bank also announced a £500 million (€596 million) share buyback, a move that failed to fully ease investor disappointment. Russ Mould, investment director at AJ Bell, noted that the company's third-quarter performance did not match expectations, and he pointed to two “major clouds over the business.”
“The first being a widely expected increase in tax on the sector in next week's (UK) budget and the other being a reported probe into possible misrepresentation of risks in its private credit portfolio,” Mould said. According to the Financial Times, the Bank of England is examining claims that Barclays understated risks linked to financing for private credit funds, potentially allowing the bank to hold less capital to cover potential losses.
The job cuts at Barclays reflect a broader trend across European banking, where institutions are increasingly turning to automation and AI to cut costs. Similar moves have been seen at other major lenders, as the industry grapples with margin pressures and the need to invest in digital infrastructure. The shift raises questions about the future of employment in the sector, as well as the potential for technology to deliver lasting efficiency gains without undermining growth.
