Barclays cuts 5,000 jobs as profits rise and its CEO calls AI the icing on the cake

Barclays is shedding roughly one in every twenty people it employs, and the bank’s chief executive wants it understood that artificial intelligence is only part of the reason. The cuts were announced alongside quarterly results showing higher profits and another round of cash for shareholders, a sequence that shows who collects the first returns on years of technology spending.

For anyone who works in a bank’s back office, a support team or a software unit, this is the version of the AI story that matters: a lender that has spent years rebuilding its systems can now run the same business with fewer people. A significant share of the reduction is expected to fall in India, where Barclays handles much of the support work for its British operations.

Where the 5,000 jobs go

The bank expects to cut about 5,000 full-time roles, around 5% of its roughly 93,000 staff worldwide. Chief financial officer Anna Cross told reporters that 1,000 posts have already gone and the other 4,000 will follow before the end of the year. About 60% of the reductions sit in support functions, developers among them. The savings are concentrated in the UK retail bank, though the investment bank is also affected, and Cross tied the programme to more than £1.1bn of savings planned for 2027.

Chief executive C. S. Venkatakrishnan was careful with the framing. “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.” Asked how many of the cuts were directly caused by AI, he pointed instead to deep investment in technology and the simplification of processes, which he said is driving the bulk of the efficiency gains so far.

What the AI label hides

That answer is the weak point in the story Barclays is telling. The bank would not put a number on the jobs that AI itself removed, so the label covers a broader cost drive that is now finishing a three-year plan. Russ Mould, investment director at AJ Bell, said Barclays was “reaching for the AI lever” while failing to match expectations with its results. Pre-tax profit rose 12% to £2.3bn in the three months to September, slightly below analysts’ forecasts, and fixed income trading income fell 19%, much worse than the 5% drop at US banks. “I am disappointed and you can be sure this will get my attention,” Venkatakrishnan said of that business.

The pattern is wider than one bank. Will Howlett, financials analyst at Quilter Cheviot, said banks have spent heavily on technology for years and are now “reaching the point where that investment translates into fewer people being required to run the business”. Standard Chartered, another UK-headquartered lender, said earlier this year it would cut more than 7,000 jobs over four years as it expands AI, about 15% of its back-office roles by 2030.

Shareholders, meanwhile, get more. Barclays announced a new £500m buyback, which takes its returns to investors this year to £2.8bn, up 46%. Britain’s Trades Union Congress responded by calling for a heavier levy on bank profits, arguing that lenders have profited from high mortgage rates. The share price fell 2.5% in early trading on Thursday, 22 October, before edging back, after losing about a fifth of its value over the previous three months.

The next test comes on Wednesday, 28 October, when the UK budget is expected to raise the bank surcharge, an extra tax on bank profits that now stands at 3%. Richard Hunter, head of markets at interactive investor, cited a market estimate that it returns to 8%, which could reduce earnings by about 6%. By 31 December the remaining 4,000 posts are due to be gone, and the £1.1bn of promised savings has to appear in the 2027 accounts. Those numbers will show how much of the saving was the cake, and how much the icing.

Tags: layoffs, banking, Standard Chartered, AI and jobs, Barclays, C. S. Venkatakrishnan