Barclays to cut 5,000 jobs as AI drives cost-saving push and lender seeks to improve returns

Barclays plans to cut around 5% of its workforce this year as it looks to reduce fixed costs using artificial intelligence (AI) and improve returns, Reuters reported.

Of the 5,000 job cuts announced by the lender, around 1,000 roles have already been eliminated, with the remaining cuts expected by the end of 2026.

The job cuts come as Barclays reported third-quarter profit of £2.3 billion ($3.08 billion), up from a year earlier but below analysts’ expectations. The lender’s fixed-income trading business underperformed, weighing on its investment bank’s results.

“I am disappointed, and you can be sure this will get my attention,” CEO CS Venkatakrishnan said, according to Reuters, referring to the underperformance of fixed-income trading, traditionally one of the bank’s strengths.

Barclays’ shares have fallen 14% this year, following several years of gains as higher interest rates boosted profits.

Investment bank income misses estimates

Barclays’ investment bank reported third-quarter income of £3.1 billion, below analysts’ forecasts of £3.3 billion.

Equities revenue rose 47%, outperforming the average increase of 37% reported by the five largest US investment banks, according to Reuters calculations based on company statements.

However, income from fixed-income trading fell 19% to £1 billion. This was a steeper decline than the 5% drop recorded by US peers and was also below analysts’ expectations of £1.3 billion.

Results from major US investment banks earlier this month also highlighted uneven performance across trading and dealmaking. Slower deal activity and weaker fixed-income trading weighed on revenues, while equities trading continued to benefit from the strong momentum seen in the first half of the year.

Banks face potential tax changes

Barclays is the first major European lender to report quarterly earnings ahead of UK Finance Minister John Healey’s first budget on October 28, with the possibility of further taxes on banks adding to industry concerns.

Healey has not ruled out raising taxes on banks’ profits despite intensive lobbying by the industry in recent months, Reuters reported. The government is considering higher taxes to fund its policy agenda as rising borrowing costs put pressure on public finances.

Banks have argued that they already face higher taxes than lenders in other jurisdictions and that additional levies could constrain lending.