Barclays to cut 5,000 jobs as AI technology replaces support roles

Barclays (BARC.L) said it would cut around 5,000 jobs or 5 per cent of ‌its workforce this year, as it uses technology such as AI to slash fixed costs and improve overall returns. The job cuts were revealed as Barclays reported third-quarter profit of £2.3 billion ($3.08 billion), up from a year ago but undershooting analysts’ forecasts as its fixed income trading business underperformed. “I am disappointed, and ​you can be sure this will get my attention,” CEO C.S. Venkatakrishnan said about the bank’s traditional strength of fixed ​income trading, blaming a volatile quarter and weak trading in rates and credit products in particular. The ⁠bank said it had taken a further £201 million in “structural cost actions” in the third quarter, part of its longer-term plan to ​reduce expenses like staff costs through greater use of technology. Around 60 per cent of the overall job cuts will impact staff in support functions such ​as developers, CFO Anna Cross told reporters, in one of the clearest signs yet from a big bank of how AI is enabling firms to reduce headcount in such roles. Cross said 1,000 roles have already gone, with the remainder to be cut by the end of the year. Barclays shares fell ​2.5 per cent in early trading, underperforming other lenders (.SX7P). The bank’s shares have fallen 14 per cent so far this year, in line with European ​peers which have sold off after years of rallying as higher interest rates lifted profits. Shore Capital said in a note that the results were softer ‌than ⁠expected due to the disappointing performance by the investment bank. BUDGET LOOMS Barclays is the first major European lender to report its quarterly earnings, with British banks’ results likely to be overshadowed by finance minister John Healey’s first budget on October 28, where further taxes on banks may be levied. Healey has refused to rule out hiking taxes on banks’ bumper profits despite intensive public and private lobbying by ​the industry in recent months, as ​the finance minister mulls higher ⁠taxes to help fund the Labour government’s policy agenda and as higher borrowing costs eat into the public purse. Banks have argued they are already highly taxed compared with other jurisdictions and that any ​such levy would curb lending. INVESTMENT BANK’S MIXED QUARTER Barclays’ investment bank reported total income in the ​third quarter of £3.1 billion, ⁠lower than forecasts for £3.3 billion. Third-quarter earnings from Barclays’ Wall Street rivals earlier this month showed the cyclical nature of investment bank revenue, as dealmaking slowed and fixed income desks underperformed, with only equities trading sustaining the strong momentum seen in the first half of the year. Barclays’ equities ⁠revenue rose ​47 per cent, outperforming the average 37 per cent gain across the top five US players ​according to a Reuters calculation from company statements. The British lender, however, saw income from fixed income trading slide 19 per cent to £1 billion, weaker than a 5 per cent drop among its ​US peers and worse than analysts’ forecasts for £1.3 billion.