Barclays plans to eliminate around 5,000 jobs this year, equivalent to approximately 5% of its workforce, as the UK bank expands its use of technology, including artificial intelligence (AI), to reduce costs and improve returns.
The announcement came alongside third-quarter results showing profit of £2.3 billion ($3.08 billion), up year on year but below analysts’ expectations, following weaker performance in fixed income trading.
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AI And Automation Reshape Support Functions
Around 60% of the planned job cuts will affect support functions, including developer roles, Chief Financial Officer Anna Cross said. The move offers a clear indication of how technology is increasingly influencing staffing decisions across major banks.
Cross said 1,000 positions had already been eliminated, with the remaining cuts expected by the end of the year. Barclays also recorded £201 million in additional structural cost reductions during the third quarter as part of its longer-term drive to lower expenses.
Chief Executive C.S. Venkatakrishnan said he was “disappointed” with fixed income trading performance, citing market volatility and weaker results in rates and credit products.
Shares Fall After Results Miss Forecasts
Barclays shares fell 2.5% in early trading, underperforming the wider European banking sector. The stock has declined around 14% this year, broadly in line with regional peers following several years of gains driven by higher interest rates and stronger margins.
Analysts at Shore Capital described the results as weaker than expected, highlighting the investment bank’s performance.
UK Budget Adds To Industry Uncertainty
Barclays is the first major European lender to report quarterly earnings, with the outlook for UK banks also shaped by Finance Minister John Healey’s budget on October 28.
The sector is preparing for the possibility of higher taxes on banks. Healey has not ruled out additional levies on bank profits, as the government considers ways to raise revenue and fund its policy agenda.
Banks argue that they are already heavily taxed compared with competitors in other jurisdictions and warn that further charges could constrain lending.
Investment Banking Delivers Mixed Results
Barclays’ investment bank generated £3.1 billion in third-quarter income, below forecasts of £3.3 billion, reflecting weaker fixed income trading despite continued strength in equities.
Equities revenue rose 47%, outperforming the average 37% increase recorded by the five largest US banks, based on calculations from company disclosures.
Fixed income trading income, however, fell 19% to £1 billion, compared with a 5% decline among US peers. The result also missed analysts’ expectations of £1.3 billion, weighing on the bank’s overall performance.
