Barclays cutting 5,000 jobs in AI-led efficiency drive

Barclays has revealed it is cutting 5,000 jobs - 5% of its workforce - as part of efforts to save costs and drive efficiency through investment in artificial intelligence (AI).

The UK-based bank said it had already shed around 1,000 of the roles and would complete the rest of the cuts by the end of the year.

The bulk of the losses are expected in its home market, and will mainly affect operational and functional roles, but Barclays said its workforce would be hit globally.

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Group chief executive CS Venkatakrishnan said the reductions - part of a recent drive for greater profitability - were borne out of "investments which we've made into technology over a number of years and which we continue to make".

He added: "AI has an important role to play and may have a more important role to play in the future.

"I've often said that it is the icing on the cake - it's not the cake - because you need to do the infrastructure build to get the benefits of AI.

"Where the infrastructure is modern, we've been applying it here."

It's a trend being seen across financial services companies as AI-led work processes are seen as reducing the need for human involvement in many back office functions, including development.

A strong example of this came in the spring when the boss of Standard Chartered bank spoke of a need to replace "lower-value human capital" while revealing plans for thousands of job losses.

A Barclays spokesperson said: "We are positioning Barclays for the future, building the workforce and skills needed to deliver our strategy and meet the evolving needs of our customers and clients.

"In doing so we are committed to helping our colleagues develop and build rewarding careers, while meeting the changing needs of customers and clients and ensuring Barclays continues to succeed in the years ahead."

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The job cuts were revealed as Barclays reported profits for the third quarter of £2.3bn.

The figure was up 12% on the same period last year but missed analysts' forecasts as its fixed income ​trading business underperformed.

Shares were down more than 2.5%.

AJ Bell investment director Russ Mould said of the company's job cuts update: "The announcement comes as the company failed to match expectations with its third-quarter performance - with the unveiling of a healthy share buyback failing to entirely ease investors' disappointment.

"Barclays is an outlier compared with UK counterparts Lloyds and NatWest thanks to its meaningful investment banking presence.

"The performance here was a real mixed bag as its equities trading division performed robustly but it suffered on the fixed income side.

"Across the wider group costs went up and Barclays shareholders are also having to contend with two major clouds over the business.

"The first being a widely expected increase in tax on the sector in next week's Autumn Budget and the other being a reported probe into possible misrepresentation of risks in its private credit portfolio.

"The former will at least be resolved in the near term, but the latter looks set to weigh on the shares for longer as the Bank of England's Prudential Regulation Authority pursues its investigation."

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