Barclays Cutting 5,000 Jobs with Reliance on AI
Barclays is cutting around 5,000 staff as it integrates more artificial intelligence (AI) into its operations. The banking group said it had already closed 1,000 posts and expects to complete a further reduction of 4,000 by the end of this year, bringing the total to around 5% of its global workforce.
The BBC reports that the bank’s cost reductions focus on its UK retail bank, but some UK back-office functions are done in India, where a significant share of the job cuts is expected.
Barclays said the changes result from an ongoing modernisation plan, with AI as the “icing on the cake” of its strategy.
Although not all cuts are due to AI, their scale will raise further concerns about the impact of the new technology.
Company spending on AI is rising, along with claims that new tools can replace basic tasks currently done by staff, such as administrative and programming work.
HSBC, Standard Chartered and Danske Bank have also flagged AI-related job cuts this year.
“It is a hot button topic,” said AJ Bell investment analyst Russ Mould.
However, banks have not yet made big moves toward the widespread introduction of AI, and they would consider the implications for security and customer service before implementing AI to achieve financial savings, he said.
“Any company at any time needs to keep on top of its cost base,” he said. “It will be intriguing to see what other banks say in their results in the coming weeks.
Sharon Graham, general secretary of the Unite union that represents banking sector workers, said the company was “using AI as an excuse to discard its loyal and long-suffering workforce”.
“Employers should be focused on upgrading employees’ skills so that they remain employed as new technology changes the workplace. Instead, Barclays is guilty of taking a short-term, knee-jerk approach,” she said.
Barclays is nearing the end of a three-year cost-cutting programme focused primarily on its UK retail banking arm, although the investment banking division is also affected.
AJ Bell’s Russ Mould said that despite “reaching for the AI lever”, Barclays failed to meet expectations with its financial results.
Barclays also revealed it made £2.3bn profit in the three months to September, higher than the same period a year ago, but slightly less than forecast.
Barclays Group chief executive CS Venkatakrishnan said the job cuts resulted from significant investment in technology to simplify and improve its business.
“AI has an important role to play and may have a more important role to play in the future. We will employ 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.”
Barclays said around 60% of the job cuts will fall within its support functions, including among developers.
Will Howlett, a financial analyst at Quilter Cheviot,t said the cuts illustrated “how significantly AI and automation could reshape the banking industry over the next few years. 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.
Barclays said it expects its efficiency measures to deliver an additional £1.1bn in savings in 2027.