British multinational bank Barclays has announced plans to eliminate 5,000 jobs by the end of 2024, representing approximately 5% of its total workforce, as part of an efficiency push linked to artificial intelligence. The reductions follow a third-quarter profit increase of 12%, with pre-tax profits rising to £2.3 billion compared to £2.1 billion in the same period last year.
The job cuts are framed as part of a broader cost-reduction strategy aimed at reinvesting savings into technology and growth initiatives. Barclays stated the reductions stem from organizational simplification and AI-driven efficiency improvements, primarily affecting support functions such as developers. The bank has already implemented 1,000 job cuts and plans to complete the remaining 4,000 by the fourth quarter.
Profit Growth and Shareholder Returns
Barclays reported its third-quarter earnings on October 31, highlighting a 12% rise in pre-tax profits to £2.3 billion. The bank also announced a £500 million share buyback, bringing total shareholder distributions to £2.8 billion this year—an increase of 46% year-on-year. These financial moves come amid expectations of a windfall tax on bank profits in the upcoming UK Budget, which Barclays has publicly opposed.
Banking Sector Shifts and Policy Concerns
The job cuts align with a broader trend in the banking sector toward automation and AI adoption to reduce operational costs. Earlier in October, HSBC was reported to be preparing for significant job reductions in its wealth management division. Industry figures have warned that proposed increases to the UK bank levy—expected to rise from 3% to 8%—could deter investment, raise mortgage rates, and constrain lending to businesses and households.
Barclays CEO CS Venkatakrishnan has previously urged the UK government to maintain the current bank levy, arguing that the bank’s lending model supports economic growth by providing £8 to £10 in loans for every £1 of capital held. The bank’s leadership has emphasized that the cost-cutting measures are intended to free up resources for future investments rather than solely to offset tax pressures.
Trade Union Response
The announcement has drawn criticism from labor groups. Paul Nowak, general secretary of the Trades Union Congress (TUC), has previously condemned AI-driven job cuts in the sector, warning of long-term workforce displacement without adequate safeguards.
The bank’s restructuring plan reflects a broader debate over the balance between technological advancement, shareholder returns, and employment stability in the financial services industry.