Barclays announced plans to cut about 5,000 jobs by the end of 2026 as it restructures operations, reduces costs and expands its use of artificial intelligence. The planned reductions amount to about 5% of the British bank’s workforce and come as its quarterly profit missed analysts’ expectations.

The plans were disclosed with Barclays’ third-quarter report. Roughly 60% of the cuts will fall on support functions, where the bank said “AI makes our people more productive.”

Barclays expands AI use in restructuring

Barclays cut 1,000 jobs in the first half of 2026 as part of a restructuring that also includes technology investment and a review of operating processes.

Chief Executive C. S. Venkatakrishnan said artificial intelligence would become an important part of the transformation but would not replace every other component of the business.

“We will employ AI at scale: but AI is the icing on the cake, not the cake,” he said.

Barclays spent £307 million ($411 million) on transformation during the first nine months of the year. It expects to incur an additional £300 million ($401 million) in restructuring costs by the end of 2026.

Quarterly profit misses forecasts

Barclays reported third-quarter pre-tax profit of £2.3 billion ($3.1 billion), up 12% from a year earlier but below analysts’ forecast of £2.42 billion ($3.24 billion). Revenue increased 3% year on year to £7.4 billion.

Weak performance in fixed-income trading contributed to the shortfall, with profit in the unit falling 19%. Overall investment-bank revenue was flat.

The equities trading unit, by contrast, recorded its best quarter in more than a decade and generated £1 billion in revenue. Barclays attributed the segment’s nearly 50% revenue increase to investments in prime brokerage and equity derivatives.

Venkatakrishnan acknowledged the weaker fixed-income results and said trading in some interest-rate and credit segments was worse than expected.

“This is always the house that fixed income built. I am a fixed income guy through and through […] so I am very disappointed and this will get my attention,” he said.

Operating expenses rose 6%, reflecting business expansion and additional payments to high-performing employees after changes to the remuneration system for staff who take on material risks.

Venkatakrishnan also addressed a possible increase in taxes on banks in the UK’s upcoming budget. He said Barclays’ position on bank taxation remained clear while acknowledging that the government must balance different public interests.

Automation prompts wider workforce reviews

The cuts come amid a wider debate about automation’s effect on financial-sector employment. HSBC reportedly plans a significant headcount reduction in its UK wealth-management unit while using AI to serve high-net-worth clients.

JPMorgan Chase plans to hire more artificial-intelligence specialists and fewer traditional bankers. Morgan Stanley has said European banks could reduce staffing by 10% to 20% over the next five years through automation.

In the cryptocurrency industry, Coinbase, Crypto.com and Jack Dorsey’s Block have reported staff reductions amid AI adoption.

Source: Incrypted