Barclays Cuts 5,000 Jobs as Banking Sector Confronts AI-Driven Modernisation

Barclays has announced plans to cut around 5,000 staff members as the banking group introduces increased levels of artificial intelligence into its working processes. The reduction amounts to approximately 5% of the firm's global workforce.

According to the institution, 1,000 of these posts have already been closed, while a further reduction of 4,000 positions is expected to be completed by the end of this year. The bank stated that the changes stem from an ongoing modernisation plan.

The cost reductions are primarily focused on the UK retail bank, though some back-office functions for the UK are carried out in India, where a significant proportion of the job losses are anticipated to fall. Approximately 60% of the cuts are expected within support functions, which includes developers.

Company spending on artificial intelligence is increasing alongside claims that new tools can handle basic tasks currently performed by staff, such as programming and administrative work. Group chief executive CS Venkatakrishnan stated that the job cuts resulted from significant technology investments aimed at simplifying and improving the business.

Describing artificial intelligence as the icing on the cake rather than the cake itself, Mr Venkatakrishnan noted that infrastructure must be built first to secure the benefits of the technology, which the bank plans to employ at scale.

While the lender noted that not all of the reductions are directly due to artificial intelligence, the scale of the announcement has heightened broader industry concerns. Other financial institutions, including HSBC, Standard Chartered and Danske Bank, have also flagged technology-related job cuts during the year.

The strategy has drawn criticism from labour representatives. Sharon Graham, general secretary of the Unite union, accused the employer of taking a short-term approach and using new technology as an excuse to discard workers, arguing that organisations should focus on upgrading employee skills instead.

Analyst commentary highlights the shifting operational landscape for financial institutions. Russ Mould from AJ Bell observed that while Barclays has reached for the technology lever, the bank failed to match market expectations with its financial results, despite reporting a profit of £2.3bn in the three months to September.

Mr Mould noted that banks have not yet made massive moves toward widespread implementation and will weigh implications for customer service and security before pursuing financial savings. Meanwhile, Quilter Cheviot financials analyst Will Howlett suggested the move illustrates how automation could reshape the sector by translating long-term technology investments into reduced headcounts.

Barclays has indicated that it expects its efficiency measures to deliver an additional £1.1bn in savings by 2027 as it approaches the conclusion of a three-year cost-cutting programme.

Source: BBC News — Barclays cutting 5,000 jobs as it increases reliance on AI.