Artificial intelligence is already biting: Barclays Bank to cut 5,000 jobs

Barclays Bank will cut 5,000 jobs, about 5% of its workforce, to reduce costs and improve efficiency through investments in artificial intelligence. The bank has already eliminated about 1,000 positions and will complete the rest by the end of the year. Third-quarter profit rose 12% to £2.3 billion, but missed analyst expectations due to weakness in bond trading.

Barclays Bank will cut 5,000 jobs, about 5% of its workforce, as part of efforts to reduce costs and improve efficiency through investments in artificial intelligence. The British bank said it has already eliminated about 1,000 of the positions, and will complete the remaining cuts by the end of the year. Most of the cuts are expected to take place in the UK, the bank's home market, and will focus mainly on operational and back-office roles. However, Barclays noted that the cuts will affect its workforce worldwide. Group CEO C.S. Venkatakrishnan said the cuts are based on technological investments the bank has made over the years. He stated, "Artificial intelligence has an important role, and perhaps in the future it will have an even more important role," but emphasized that it is not standalone: "I have often said it is the icing on the cake, it is not the cake itself." The trend reflects a broader shift in the financial services industry. Last spring, the CEO of Standard Chartered Bank said there was a need to replace "lower-value human capital" while revealing plans to cut thousands of jobs. The job cut announcement was made alongside the third-quarter results report. Barclays posted a profit of £2.3 billion, up 12% from the same period last year, but below analyst expectations. Bond trading activity underperformed, while equity trading performed strongly. The bank's stock fell more than 2.5%. Russ Mould, investment director at AJ Bell, noted that the cuts were announced after the bank missed expectations in the third quarter, and that a significant share buyback program did not fully dispel investor disappointment. He said Barclays has significant exposure to investment banking, distinguishing it from other British banks, including Lloyds and NatWest. Shareholders face two risk factors: a expected tax increase on the financial sector in the UK government's autumn budget, and a reported investigation into possible misrepresentation of risks in the bank's private credit portfolio.