Barclays is cutting about 5,000 jobs this year as the rollout of artificial intelligence and other technology allows the FTSE 100 bank to reduce costs.
The lender said today that it was reducing its headcount by about 5 per cent this year, with about 1,000 jobs cut in the first half alone. It disclosed the reductions in its third-quarter results, which also included an additional £500m share buyback.
Pre-tax profits in the three months to the end of September rose 12 per cent year-on-year to £2.3bn, Barclays said. That was below the £2.4bn expected by City analysts.
Barclays is one of eight firms selected by the Financial Conduct Authority for the second cohort of its AI Live Testing programme, under which firms trial AI applications with the regulator and its technical partner Advai. Testing began in April and is due to conclude by the end of the year, according to the FCA.
In April, Vim Maru, chief executive of Barclays UK, told Business Matters that AI was being used to streamline internal processes, though he was cautious about the workforce implications. He drew a parallel with the introduction of cash machines, after which he said staff were redeployed rather than made redundant.
Barclays’ investment banking division benefited from increased stock market trading by clients, which lifted income from equities by 47 per cent to £1bn. Income at its fixed income, currencies and commodities (FICC) trading unit fell 19 per cent to £1bn, against analyst expectations of a slight rise to almost £1.3bn.
CS Venkatakrishnan, the chief executive, said: “The investment bank delivered strong equities performance, offsetting a challenging environment for FICC.”
He added: “I am pleased with the ongoing momentum of Barclays’ operational and financial performance.”
In the UK, the bank’s high street business was supported by elevated borrowing costs. The division’s net interest margin, the difference between what it charges for loans and pays on deposits, edged up to 3.69 per cent from 3.68 per cent a year earlier. Five years ago, before interest rates began to rise, the margin was 2.49 per cent.
Barclays is the first of Britain’s biggest banks to report in the current earnings season. Results from lenders fall on both sides of John Healey’s first Budget as chancellor on 28 October, and he is expected to increase levies on the industry to help shore up the public finances.
Banks have been seen as candidates for a tax rise because interest rates have stayed higher for longer since late 2021, boosting their profits. The Trades Union Congress and the campaign group Positive Money are among the bodies that have called on Mr Healey in recent months to impose some form of windfall tax on the industry to help fund cost of living measures for households. It was reported last week that he had decided to use the Budget to increase taxes on lenders.
The industry has repeatedly argued that it already carries a heavy tax burden. Banks pay two bank-specific taxes, a corporation tax surcharge on profits and a balance sheet levy. Lenders say higher levies would curb their lending and risk prompting international banks with UK operations to divert investment to other countries.
Mr Venkatakrishnan made a similar case in September 2025, ahead of Rachel Reeves’s Budget, when he warned that a banking tax raid would mean fewer jobs and less lending to British businesses.
Barclays shares, which have fallen more than 12 per cent so far this year, dipped 0.2 per cent to 418p in early trading today.
