Barclays is cutting 5,000 jobs as part of wider cost-cutting plans that its bosses say are being driven by advances in AI.
The job cuts will mean losing about 5% of the bank’s 93,000 global staff, with executives confirming they had already cut 1,000 workers since the start of the year.
The bank’s chief financial officer, Anna Cross, told reporters on Thursday that the job cuts were part of plans to save more than £1.1bn in 2027. “These actions involve an expected reduction of circa 5,000 full-time employees. Around 60% of the group actions relate to support functions, including fewer developers, as AI makes our people more productive.”
When asked how many of the total job cuts would be directly linked to advances in AI, the chief executive, CS Venkatakrishnan, said the bank had been making “deep investments” in technology and simplifying its processes.
“That is driving the bulk of the efficiency gains that you’ve seen so far. AI has an important role to play and may have a more important role to play in the future,” Venkatakrishnan said, calling AI the “icing on the cake” to modernising the bank’s technology.
“We have been focusing on the infrastructure build, and where the infrastructure is modern, we’ve been applying AI.”
The news comes months after another UK-headquartered bank, Standard Chartered, announced plans to cut more than 7,000 jobs over the next four years as it ramps up the use of AI. It will mean slashing about 15% of its back-office roles by 2030.
Barclays also announced plans to hand a further £500m to shareholders after reporting a jump in quarterly profits.
The lender said it logged £2.3bn in pre-tax profits over the July to September quarter, up 12% from £2.1bn during the same period last year.
Venkatakrishnan said he would be passing more cash to investors through a £500m share buyback, taking the total amount given to shareholders since January – through buybacks and dividends – to £2.8bn.
The chancellor, John Healey, is due to announce a hike on banks in the 28 October budget, as Andy Burnham’s government looks for ways to raise revenue to help fund cost of living support programmes.
Barclays’ strong performance included a 6% rise in net interest income at its UK retail banking operations, to £2bn. The figure has become a flashpoint for campaigners pushing for a bank tax. It accounts for how much money banks make from loan charges, minus what they pay on deposits, and is linked to interest rates, which have been rising as the Iran war has driven up inflation expectations.
The Trades Union Congress, which has been campaigning for a bank tax increase, said lenders needed to contribute more at a time when people were struggling with household bills.
The TUC general secretary, Paul Nowak, said: “Barclays’ bumper profits aren’t an anomaly. All the big banks are doing exceptionally well at the same time – but their windfall profits have been underpinned by mortgage misery for millions. That’s why it’s time for banks to pay a fairer share.
“At a time when the chancellor needs to raise more revenue to support households and businesses through a looming energy bill crunch, Britain’s big four banks have made £200bn in profit since 2021. They can – and should – pay more tax.”
Healey has promised that next week’s budget will support Britain’s entrepreneurs, and focus on cutting the “cost of business”.
He told the Times: “I want to be a chancellor who backs business in Britain making a profit, those entrepreneurs who in the end are the ones who challenge the status quo, come up with innovative ideas and are trying, some of them through sheer bloody-mindedness, to keep going through these sorts of pressures, which is what they’ve done.”