Barclays to Cut 5,000 Jobs in AI Efficiency Drive as Third-Quarter Profits Rise 12%
Barclays is eliminating roughly 5% of its global workforce while posting pre-tax profits of £2.3bn and launching a £500m share buyback.
At a glance
- Barclays is shedding 5,000 jobs, or 5% of its workforce, with 1,000 cuts completed and 4,000 scheduled before year-end.
- Third-quarter pre-tax profits rose 12% to £2.3bn, alongside an announced £500m share buyback for investors.
- Executives said cost-cutting is driven by AI and process simplification to save over £1.1bn by 2027.
Barclays announced on Thursday that it is eliminating approximately 5,000 roles across its global operations as part of a restructuring plan driven by technological investments and advances in artificial intelligence. The lender made the disclosure alongside its third-quarter financial results in London, which showed pre-tax earnings rising 12% to £2.3bn for the July to September period.
The staff reductions affect around 5% of the bank's 93,000 worldwide employees. Anna Cross, the group's chief financial officer, stated during a briefing that 1,000 positions have already been cut, with the remaining 4,000 planned by the end of the year. Cross noted that the measures support targets to reduce annual costs by more than £1.1bn in 2027, with about 60% of the cuts targeting support functions.
Chief executive C. S. Venkatakrishnan said the bank has been investing heavily in technology and streamlining internal procedures to increase efficiency. He stated that while general process changes have generated the bulk of recent productivity gains, artificial intelligence has an important role that is likely to expand in the future. Over the quarter, the bank's cost-to-income ratio decreased from 63% to 62%.
Strong Quarterly Returns and Tax Scrutiny
Total revenue rose 3% year on year to £7.4bn during the quarter, bringing profits for the year to date to £8.4bn. UK retail operations recorded a 6% increase in net interest income, which reached £2bn. Alongside the results, Barclays unveiled an additional £500m share repurchase programme, raising its total capital returned to shareholders this year to £2.8bn.
Performance across business divisions was varied. Within the investment bank, equity trading income increased by 47% and advisory fees grew by 13%, but fixed income, currency, and commodities income dropped by 19%.
The bumper earnings arrive amid growing pressure over potential fiscal increases in the UK government's upcoming budget on 28 October. The Trades Union Congress has called on Chancellor John Healey to increase the current 3% bank surcharge to fund household energy subsidies, arguing that elevated lender returns justify higher sector contributions.
Source: The Guardian Business.
Questions and answers
- Why is Barclays cutting 5,000 jobs?
- The job cuts are part of an efficiency drive to save more than £1.1bn in 2027, driven by investments in technology, streamlined processes, and artificial intelligence, with around 60% of reductions in support functions.
- What were Barclays' financial results for the third quarter?
- Barclays reported a 12% rise in third-quarter pre-tax profits to £2.3bn, on group revenue of £7.4bn, and unveiled an additional £500m share buyback.
- How many Barclays staff are affected by the cuts?
- The reduction affects roughly 5% of Barclays' 93,000 global staff. Around 1,000 roles have already been eliminated, with another 4,000 to be cut before the end of the year.
