Barclays Cuts 5,000 Jobs in AI Efficiency Push Amid Profit Rise

British lender Barclays has announced plans to eliminate 5,000 positions, representing approximately 5% of its total workforce. The job cuts are part of a broader efficiency push linked to artificial intelligence, which the bank states is necessary to streamline operations and focus resources on future investments.

The announcement arrived alongside the bank’s third-quarter earnings report, which detailed a 12% year-on-year increase in pre-tax profit to £2.3 billion ($3.1 billion). This figure met the forecasts compiled by LSEG. However, the bank’s group income for the period reached £7.4 billion, falling short of the £7.61 billion estimate anticipated by analysts.

Operational Restructuring and AI Integration

According to the bank’s earnings presentation, the staff reductions are focused on enhancing productivity through technological advancement. Barclays indicated that the restructuring is aimed at structurally reducing the cost base to generate capacity for investment. The bank further specified that the initiative involves organisational simplification and technology change efficiency driven by AI.

Regarding the distribution of these layoffs, the bank expects that roughly 60% of the cuts will occur within support functions, a category that includes developers. While the bank is pushing forward with these efficiency measures, investor reaction was muted; shares in the bank traded nearly 1% lower by 8:50 a.m. in London on Thursday.

Financial Performance Metrics

Beyond the profit figures, other financial indicators showed mixed results for the quarter:

• Net interest income remained broadly unchanged at £3.91 billion.
• The CET1 capital ratio, which serves as a key measure of financial solvency, saw a slight decline to 14.2%, down from the 14.3% reported at the end of the second quarter.
• Return on tangible equity experienced a more significant shift, falling to 11.7% from 16.1%.

While the bank has outlined its strategy for cost reduction and technological integration, specific timelines for the completion of the 5,000 job cuts remain to be clarified.