British banking giant Barclays will be cutting around 5,000 jobs, or 5% of its workforce by 2026-end, due to the venture’s rapid adoption of artificial intelligence (AI) to reduce fixed costs and improve returns.
The job cuts were revealed as the British lender reported a third-quarter profit of 2.3 billion pounds (USD 3.08 billion), up 12% from a year earlier but below analysts’ forecasts, as Barclays’ fixed income trading business underperformed.
The bank said it had taken a further 201 million pounds in “structural cost actions” in the third quarter, part of its longer-term plan to reduce expenses, including staff costs, through greater use of technology.
“Around 60% of the overall job cuts will affect staff in support functions such as developers,” Chief Financial Officer Anna Cross told reporters.
The company has already eliminated 1,000 roles, and it expects to make the remaining cuts by the end of the year.
With the announcement, Barclays now joins the phenomenon called the “AI Layoffs.” Companies, be they Big Tech or banking, have been letting go of their human resources as automation increasingly takes up more job roles that were previously performed by the professionals.
Barclays’ shares have fallen 12% so far this year, in line with European peers that have sold off after years of gains driven by higher interest rates and stronger profits.
The lender is the first major European bank to report quarterly earnings, with British banks’ results likely to be overshadowed by finance minister John Healey’s first budget on October 28, when further taxes on banks may be introduced.
Healey has refused to rule out raising taxes on banks’ bumper profits despite intensive public and private lobbying by the industry in recent months.
The British finance minister is considering higher taxes to help fund the Labour government’s policy agenda as higher borrowing costs put pressure on public finances.
Banks have argued that they are already highly taxed compared with other jurisdictions and that any additional levy would curb lending.
Barclays’ investment bank reported total income of 3.1 billion pounds in the third quarter, below forecasts of 3.3 billion pounds.
Earnings from Wall Street rivals earlier this month highlighted the cyclical nature of investment banking revenue, as dealmaking slowed and fixed income trading desks underperformed.
Only equities trading maintained the strong momentum seen in the H1 2026.
While Barclays’ equity revenue rose 47%, outperforming the average 37% gain across the top five US players, income from fixed income trading fell 19% to one billion pounds.
The decline was steeper than the 5% drop among Barclays’ American peers and worse than analysts’ forecasts of 1.3 billion pounds.