London — Barclays Plans 5,000 Job Cuts as AI Drives Cost-Reduction Strategy
British lender Barclays intends to cut around 5,000 jobs, representing approximately 5% of its workforce, by the end of 2026 as it expands the use of artificial intelligence and other technologies to lower operating costs.
The announcement coincided with the bank’s third-quarter earnings report, which showed profit growth compared with the previous year but failed to meet analysts’ expectations. Barclays recorded quarterly profit of £2.3 billion ($3.08 billion), with underperformance in fixed-income trading weighing on the results.
Chief Executive C.S. Venkatakrishnan voiced disappointment with the investment bank’s performance, citing volatile market conditions and weakness in rates and credit products.
The planned layoffs are part of a wider strategy to improve returns and manage fixed expenses. Barclays said it implemented an additional £201 million in structural cost measures during the third quarter.
Chief Financial Officer Anna Cross told reporters that approximately 60% of the planned job cuts would affect support functions, including developer roles. The bank has already removed 1,000 positions, with the remaining reductions expected to be completed by the end of the year.
The restructuring reflects a broader shift across major financial institutions toward using technology to streamline operations and reduce staffing needs. Automation and AI tools are increasingly changing how support functions operate, although the resulting financial and operational benefits depend on how these technologies are deployed.
Investors responded unfavorably to the earnings report. Barclays shares dropped 2.5% in early trading, performing worse than other European lenders. The stock had fallen 14% so far in 2026, broadly matching declines among European banking peers following years of gains driven by higher interest rates.
Results across the bank’s investment division were uneven. Investment banking income totaled £3.1 billion in the third quarter, below analysts’ forecasts of £3.3 billion.
Equities trading delivered stronger results, with revenue climbing 47%. That increase exceeded the average 37% growth recorded by the five largest US investment banks, according to Reuters calculations based on company statements.
Fixed-income trading, however, remained a significant weakness. Revenue from the business declined 19% to £1 billion, compared with a 5% drop among US peers. Analysts had anticipated £1.3 billion in fixed-income trading income at Barclays.
The earnings announcement also comes before the UK government’s budget on October 28. Finance Minister John Healey has not ruled out raising taxes on bank profits despite lobbying efforts by the financial industry.
Banks maintain that they already face relatively high tax burdens and warn that additional levies could discourage lending. The government is weighing options to fund its policy agenda as borrowing costs continue to pressure public finances.
Barclays therefore faces several challenges as it pursues technology-driven restructuring while addressing uneven trading results and preparing for potential tax changes. Although lower costs could help strengthen profitability, the bank must also improve its investment banking performance and contend with an uncertain economic and regulatory outlook.
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