By Hamza Faisal

Barclays will cut around 5,000 jobs this year — roughly five percent of its global workforce — as the British lender leans harder on artificial intelligence to trim fixed costs and lift returns, even as third-quarter profit rose 12 percent to £2.3 billion.

The job cuts were announced alongside quarterly results on Thursday that undershot analysts' expectations, dragged down by an underperforming fixed-income trading business. The bank reported pretax profit of £2.32 billion, up from £2.08 billion a year earlier but below the £2.42 billion consensus forecast.

AI does the "icing," not the cake

Around 60 percent of the job cuts will fall on support functions, including developers, as AI tools make the remaining staff more productive, chief financial officer Anna Cross told reporters. The bank has already eliminated 1,000 roles in the first half of the year, with the remaining 4,000 cuts to be completed by year-end.

Chief executive C.S. Venkatakrishnan described the reductions as the payoff from years of deep technology investment. "We will employ AI at scale," he said. "But AI is the icing on the cake, not the cake," adding that the bank needed to build modern infrastructure before AI's benefits could materialize.

Cross said the bank booked £201 million in "structural cost actions" in the third quarter and plans a further £300 million in the fourth, part of a drive to save more than £1.1 billion in 2027.

A weak quarter on the trading floor

The cost push came as Barclays' bond traders suffered their weakest quarter in years. Revenue from fixed income, currency and commodities trading fell 19 percent to £1.01 billion, as weak trading in rates and credit products and volatile market conditions hurt activity. Venkatakrishnan called the result "somewhat disappointing."

Equities trading told a different story, with revenue jumping 47 percent — the desk's best performance since at least 2009 — nearly matching the entire fixed-income haul. Net profit rose 13 percent to £1.65 billion, broadly in line with expectations.

Banking's AI workforce reckoning

Barclays is not alone in using AI as a reason to shrink. Standard Chartered announced plans earlier this year to cut more than 7,000 jobs over four years as it ramps up AI use, while Germany's Commerzbank and Norway's DNB have outlined similar moves.

The plan has drawn union fire. Sharon Graham, general secretary of the Unite union, said workers "deserve better," accusing the bank of using AI "as an excuse to discard its loyal and long-suffering workforce."

Some of the heaviest cuts may land in India, where the bank runs significant back-office operations supporting its UK retail bank. With investors pressing every big lender to show AI returns, Barclays' message is clear: the technology spend of recent years is now expected to pay for itself — in fewer salaries.

By Hamza Faisal