Barclays to Cut 5,000 Jobs as AI Drives £1.1bn Savings Plan

Barclays is cutting 5,000 jobs — about 5% of its 93,000 global staff — as part of cost-cutting plans its bosses say are being driven by advances in AI. The bank has already shed 1,000 workers since the start of the year.

Chief financial officer Anna Cross told reporters on Thursday that the reductions feed into a target of saving more than £1.1bn in 2027. "These actions involve an expected reduction of circa 5,000 full-time employees," she said. "Around 60% of the group actions relate to support functions, including fewer developers, as AI makes our people more productive."

How much of this is really AI?

That depends on who you ask. When pressed on how many of the cuts link directly to AI, chief executive CS Venkatakrishnan pointed instead to what he called "deep investments" in technology and process simplification.

"That is driving the bulk of the efficiency gains that you've seen so far. AI has an important role to play and may have a more important role to play in the future," Venkatakrishnan said. He described AI as the "icing on the cake" to modernising the bank's technology.

"We have been focusing on the infrastructure build, and where the infrastructure is modern, we've been applying AI," he added.

The takeaway in plain words: Barclays is cutting headcount mostly through tech-driven simplification, with AI a growing but not yet dominant piece.

The move follows a similar pattern across the UK banking sector. Standard Chartered, another UK-headquartered lender, announced plans months earlier to cut more than 7,000 jobs over the next four years as it ramps up AI use — roughly 15% of its back-office roles by 2030.

Profits are climbing as headcount falls

The cuts landed alongside strong numbers. Barclays logged £2.3bn in pre-tax profits for the July-to-September quarter, up 12% from £2.1bn in the same period last year.

The bank also announced it will hand a further £500m to shareholders through a share buyback. Venkatakrishnan said the move takes the total returned to investors since January — through buybacks and dividends — to £2.8bn.

UK retail banking delivered a 6% rise in net interest income, to £2bn. That figure — what banks earn on loan charges minus what they pay on deposits — has become a flashpoint for campaigners pushing for a bank tax, and it has climbed as rising interest rates, driven by inflation expectations tied to the Iran war, lift bank margins.

The pattern is simple: fewer staff, bigger profits, more money back to shareholders.

Why a bank tax is now on the table

The political backdrop is heating up. Chancellor John Healey is due to announce a hike on banks in the 28 October budget, as Andy Burnham's government looks for revenue to fund cost-of-living support programmes.

The Trades Union Congress, which has campaigned for a bank tax increase, said lenders need to contribute more while households struggle with bills.

"Barclays' bumper profits aren't an anomaly. All the big banks are doing exceptionally well at the same time – but their windfall profits have been underpinned by mortgage misery for millions. That's why it's time for banks to pay a fairer share," said TUC general secretary Paul Nowak.

"At a time when the chancellor needs to raise more revenue to support households and businesses through a looming energy bill crunch, Britain's big four banks have made £200bn in profit since 2021. They can – and should – pay more tax," Nowak said.

Healey, for his part, has promised next week's budget will back Britain's entrepreneurs and cut the "cost of business".

"I want to be a chancellor who backs business in Britain making a profit, those entrepreneurs who in the end are the ones who challenge the status quo, come up with innovative ideas and are trying, some of them through sheer bloody-mindedness, to keep going through these sorts of pressures, which is what they've done," he told The Times.

The stakes for the 28 October budget are now clear: record bank profits, an AI-driven restructuring wave, and a government hunting for revenue all converge on the same date.