Barclays intends to reduce approximately 5,000 employees, which accounts for 5% of the total staff, this year. This decision is being made in connection with the implementation of artificial intelligence (AI) to lower operating costs and increase profitability.
The layoff announcement came against the backdrop of the publication of the third-quarter earnings report, according to which the bank's profit reached £2.3 billion ($3.08 billion USD), an increase of 12% compared to last year. Nevertheless, this result was below analysts' forecasts due to insufficient efficiency in the fixed income trading business.
Management Comments on Business
Chief Executive Officer C S Venkatakrishnan expressed disappointment with the bank's traditional strength in fixed income trading, attributing it to quarterly volatility and weak trading in rate and credit products. The bank also reported that in the third quarter, it took additional 'structural cost reduction measures' amounting to £201 million, which is part of a long-term strategy to decrease expenses, including personnel costs, through broader technology adoption.
Impact of AI on Staff
According to Chief Financial Officer Anna Cross, approximately 60% of all planned layoffs will affect support function employees, such as developers. This is seen as one of the most evident signs of how AI allows large banks to reduce headcount specifically in these roles. Anna Cross specified that 1,000 people have already been laid off, and the remaining reductions will be carried out by the end of the year.