Barclays to cut 5,000 jobs in AI-driven push

JAMES PATON

LONDON: Barclays has said it would cut about 5,000 jobs as the British bank and its competitors rely more heavily on artificial intelligence to increase efficiency and lower costs.

The company, based in London, is the latest to announce job cuts linked to its use of artificial intelligence. Standard Chartered set off a debate in May when it said it would eliminate more than 7,000 jobs.

The layoffs at Barclays, which account for 5% of the bank’s workforce, come as investors and economists look for evidence that AI can deliver on its promise to raise profits and productivity. Anxiety is widespread that the technology could lead to job losses in banking, law and similar fields. Britain has a large finance industry and is seen as particularly exposed to disruption by artificial intelligence.

About 60% of the job cuts at Barclays will affect employees with support roles, including software developers, the company said in a presentation Thursday after reporting a 12% increase in quarterly profit that fell short of what analysts had forecast. Barclays cited “organizational simplification and technology change efficiency” from its use of AI.

“AI has an important role to play and may have a more important role to play in the future,” CS Venkatakrishnan, CEO, Barclays, told reporters on a call. The company plans to employ AI “at scale,” but he added that AI is “the icing on the cake, not the cake.”

In May, Bill Winters, the head of London-based Standard Chartered, sought to reassure employees after the lender announced plans to cut thousands of support jobs over four years. Winters raised an outcry in describing the cuts as “replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in.” In the US, AI is the main reason cited by employers to reduce their workforces, with AI highlighted by companies more than 120,000 times this year, or more than a fifth of all the cuts announced, according to Challenger, Gray & Christmas, a research firm.

Barclays, which expects its efficiency measures to deliver savings of more than 1.1 billion pounds ($1.5 billion) next year, said it had already cut 1,000 of the roles.