Barclays is set to reduce its global workforce by approximately 5,000 positions as the banking group accelerates the integration of artificial intelligence into its operational processes. The company confirmed that 1,000 of these roles have already been closed, with an additional 4,000 reductions expected to be completed by the end of the current year. This total reduction accounts for roughly 5% of the bank's global staff.
The cost-cutting strategy is primarily centered on the group's UK retail banking operations. However, because a significant portion of the bank’s UK back-office functions are managed in India, a substantial number of the job losses are anticipated to occur there. Approximately 60% of the total cuts will impact support functions, which includes positions held by developers.
Barclays describes these changes as part of an ongoing modernization plan. The bank’s leadership emphasized that while AI is not the sole reason for the restructuring, the technology is considered the "icing on the cake" of their broader strategy. The company is increasing its spending on AI, claiming the technology can effectively replace basic administrative and programming tasks currently performed by human staff.
CS Venkatakrishnan, the Barclays Group chief executive, stated that the job cuts stem from significant technology investments designed to simplify and improve business operations. "AI has an important role to play and may have a more important role to play in the future," he said. "We will employ the AI at scale. 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."
The bank is nearing the conclusion of a three-year cost-cutting program focused on its retail arm, though the investment banking division is also subject to these measures. Barclays expects these efficiency initiatives to generate a further £1.1bn in savings by 2027. Despite these efforts, the bank reported a £2.3bn profit for the three months leading to September, which, while higher than the previous year, fell slightly short of market forecasts.
Industry analysts have weighed in on the move. Will Howlett, a financials analyst at Quilter Cheviot, noted that the cuts demonstrate "how significantly AI and automation could reshape the banking industry over the next few years," adding that investment in technology is increasingly translating into a reduced need for human staff. Russ Mould, investment director at AJ Bell, suggested that while Barclays is "reaching for the AI lever," the company has struggled to meet financial expectations.
"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.
