Barclays has revealed it is cutting five percent of its workforce - 5,000 people - and blaming crediting AI for it, even as it turns in a quarterly profit of £2.3 billion, up 12%.

It’s all part of efforts to save costs and drive efficiency, it seems, although costs already seem pretty tightly-managed. Operating expenses rose just one percent year-on-year to £4.6 billion, better than expected, while the cost-to-income ratio fell rom 63% to 62%

But the bank wants more and more and more, so on top of a thousand jobs already shed, another 4,000 will go before the end of the year. (Happy Christmas from Barclays, everyone!)

The bulk of the losses are expected in its home market, and will mainly affect operational and functional roles, but Barclays said its workforce would be hit globally.

According to CFO Angela Cross, the Bank is looking for “more than” one billion pounds of gross efficiency savings:

These actions involve an expected reduction of circa 5,000 full-time employees. Around 60% of the group actions relates to support functions, including fewer developers as AI makes our people more productive. Nowhere in the bank, is this more relevant than in Barclays UK, where we have taken more structural cost actions than planned in '26. Whilst this acceleration means I no longer expect Barclays UK cost to fall in '26 versus '25, we are more confident in reducing 2027 and 2028 below the '25 level.

This is enabled by improved customer-facing technology, which has reduced call center volumes by 10% in last year. While technology improvements within call centers have increased colleague productivity. Changes to the branch starting model have also reduced employees per branch by around 10% in the past year with colleagues focusing on higher value support.

Of course, Barclays is hardly alone here. Banks and Financial Services organizations have a seeming predilection towards balance sheets that have AI on the up and human headcount on the way down. Take ABN AMRO which announced plans to axe 5,200 jobs by 2028 and cited AI as the reason this would be possible without impacting service levels. The only note of regret that seems to have been voiced here by management was the CEO’s lament that it was a shame the AI rollout couldn’t be faster!

And of course the prize for the most non-empathic statement to date still foes to Standard Chartered bank where the plan is to nuke 7,500 jobs and replace "lower-value human capital" with AI by 2030. CEO Bill Winters said:

It's not cost-cutting. It's replacing in some cases lower-value human capital with the financial capital and the investment capital we're putting in.”

I asked at the time if one effect of AI was to kill off empathy along with the “lower-value human capital”? Even that most bankerish of bankers, Jamie Dimon, felt compelled to criticize Winters words as “inelegant”, which in the rarified realm of banking sector luminaries is the equivalent of a severe bollocking!

Winters tried to walk back his words, of course, but the damage was done.

No apologies incoming from his counterpart at Barclays, CS Venkatakrishnan, who attributes the next round of axing to "investments which we've made into technology over a number of years”, but now with particular emphasis on AI:

I think there's a confluence of a couple of things happening here. One is the technology opportunity set has increased and its capability has increased. Second is, what do you have to do to harness? To harness that you have to build the infrastructure to improve your processes, modern technology, framework, simple hypothesis. Now that requires perseverance and investment, which we've been putting in.

And given the capital generation which we've had, given the success of the plan so far, that has given us both the capability and the will to make those investments. So what you're seeing is technology being able to deliver more, AI sits on top of this technology. You've seen the capability financially and otherwise to make the investment and will to do it in a sustained way.

He adds:

AI has an important role to play and may have a more important role to play in the future. I’ve often said that it is the icing on the cake.

No crumb of comfort there for 4,000 people today…

We think that the promise of technology and our implementation of the technology is being realized. We think more will be realized and we are going to drive hard at that realization.

Good luck to CFO Cross’s ambition to have Barclays staff focusing on “higher value” customer support activities. I pulled all my business from Barclays a long time ago due to the absolutely dismal level of customer service on offer, in branch, online, and particularly for small businesses.

Today’s announcement is though a prime example of the kind of ‘AI killing jobs in pursuit of cost-cutting’ meme that haunts the sector. And the total lack of any empathy or remorse or discussion on the post-results analysts call about how the bank plans to manage this process with its workforce is shameful. The cuts don’t even warrant a mention in the formal results announcement statement. 

Still, those profit numbers, eh! Cheers!!! Since January, Barclays has, through buybacks and dividends, handed out £2.8 billion to shareholders. So, that’s good, isn’t it?