Barclays is reducing its workforce by approximately 5,000 as it introduces more artificial intelligence (AI) into its operations, the BBC reported. The bank stated that 1,000 jobs have already been eliminated, with a further reduction of 4,000 expected to be completed by the end of the year. This amounts to about 5% of its global workforce of 93,000 employees.

Cost-Cutting Focused on UK Retail Banking and Support Functions

The cost reductions are primarily focused on Barclays’ UK retail banking division, although some back-office functions for the UK are based in India, where a significant portion of the job cuts are expected to occur. Around 60% of the job cuts will affect support functions, including developers, as AI is used to enhance productivity.

AI as a Key Part of Modernisation Strategy

Barclays Group chief executive CS Venkatakrishnan said the job cuts are part of the bank’s ongoing modernisation plan, with AI playing an important role in the future. “AI has an important role to play and may have a more important role to play in the future,” he said, adding that AI is the “icing on the cake” of the bank’s technology strategy. “Because you need to do the infrastructure build to get the benefits of AI,” he explained.

The bank’s cost-cutting programme is reaching the end of a three-year effort focused on its UK retail banking operations, though the investment banking division is also affected. Barclays expects its efficiency measures to deliver an additional £1.1bn in savings in 2027.

Profit Growth and Shareholder Returns

Barclays reported £2.3bn in pre-tax profits for the three months to September, up 12% from the same period a year ago. The bank also announced a £500m share buyback, bringing the total amount returned to shareholders since January to £2.8bn. Venkatakrishnan said the bank would continue to focus on returning cash to investors.

Financial analysts have been watching the bank’s moves closely. Russ Mould, investment director at AJ Bell, said Barclays was “reaching for the AI lever” to cut a significant portion of its workforce as it expands the use of artificial intelligence, though he noted the bank had not yet fully matched expectations with its financial results. Will Howlett, financials analyst at Quilter Cheviot, said the cuts illustrated the potential for AI and automation to reshape the banking industry in the coming years.