Barclays cutting 5,000 jobs as it increases reliance on AI

Barclays is cutting its staff by around 5,000 as it introduces more artificial intelligence (AI) into its work processes.

The banking group said 1,000 posts had already been closed and it expects a further reduction of 4,000 to be complete by the end of this year, amounting to around 5% of its global workforce.

The bank's cost reductions are focused on its UK retail bank, but some back office functions for the UK are done in India, where a significant proportion of the job cuts are expected to fall.

Barclays said the changes were the result of an ongoing modernisation plan, with the use of AI being the "icing on the cake" of its strategy.

The banking group is reaching the end of a three year cost-cutting programme focused primarily on its UK retail banking arm, although the investment banking division is also affected.

Barclays also revealed it made £2.3bn profit in the three months to September, higher than the same period a year ago, but slightly less than forecast.

Economists have been watching companies' results carefully for signs that investment in new technology, and AI specifically, is making a difference in their day-to-day operations, leading to greater efficiency and lower employment.

Barclays Group chief executive CS Venkatakrishnan said the job cuts were the result of significant investment it is making in technology to simplify and improve its business.

"AI has an important role to play and may have a more important role to play in the future.

"We will employ the AI at scale," he said. "But AI is the icing on the cake not the cake.

"Because you need to do the infrastructure build to get the benefits of AI."

Barclays said around 60% of the job cuts will fall within its support functions, including among developers.

Russ Mould, investment director at AJ Bell, said Barclays was "reaching for the AI lever, expecting to cut a decent chunk of its workforce as it expands the use of artificial intelligence", but had failed to match expectations with its financial results.

Will Howlett, financials analyst at Quilter Cheviot said the cuts illustrated "how significantly AI and automation could reshape the banking industry over the next few years".

"Banks have spent heavily on technology for years, but we are increasingly reaching the point where that investment translates into fewer people being required to run the business," he said.

Barclays said it expects its efficiency measures to deliver a further £1.1bn of savings in 2027.

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