Barclays will reduce its global workforce by 5,000 employees, representing about 5% of its staff, by the end of 2026. The British bank stated that these job cuts are a result of increased productivity driven by artificial intelligence and other technological advancements. The bank's chief financial officer, Anna Cross, indicated that these actions are part of a plan to achieve over £1.1 billion in savings by 2027. Approximately 60% of the affected roles are in support functions, including developers, as AI tools enhance the efficiency of existing personnel.
The announcement accompanied Barclays' third-quarter earnings report, which showed a 12% increase in profit before tax to £2.3 billion. Total income for the quarter rose by 3% to £7.4 billion. Despite the profit growth, the bank's performance in fixed-income trading fell by 19%, falling short of analyst expectations. Equities income, however, saw a significant rise of 47%. The bank also announced a new share repurchase program of up to £500 million.
Chief Executive C.S. Venkatakrishnan described AI as the "icing on the cake" for the bank's modernization efforts, emphasizing that foundational technology investments are the primary drivers of efficiency gains. He noted that AI plays an important, and potentially increasing, role in future efficiency improvements. The job reductions stem from a multi-year digital transformation initiative that integrated AI tools across core banking functions, with machine learning models now processing loan applications, detecting fraud, and handling routine customer inquiries. Natural language processing systems manage over 40% of customer service interactions, and document processing automation has transformed compliance functions.
The cuts align with broader industry trends, as financial institutions increasingly integrate AI to reduce operational costs and enhance efficiency. Standard Chartered, another UK-based bank, recently announced plans to cut more than 7,000 jobs over four years, citing increased use of AI.
Separately, a taskforce comprising technology firms including Nvidia, Microsoft, and Cisco has warned the UK government that it has approximately 12 months to establish a framework for local community benefits related to data center development. The group, known as the Sovereign AI Leadership (SAIL) taskforce, fears that without clearer benefits for host communities, public opposition could escalate to US-style protests, potentially threatening the construction of essential AI infrastructure. The taskforce proposes that local councils hosting data centers should retain a greater share of tax revenues and receive scaled financial or facility contributions. This comes amid growing public scrutiny of data centers due to energy consumption and environmental concerns.