The bank is linking the workforce reductions to technology investments intended to streamline internal processes and reduce its ongoing operating expenses. Its earnings presentation described the initiative as "organisational simplification and technology change efficiency driven by AI."
"AI makes our people more productive," Cross told analysts.
Barclays has been investing in technology modernization for several years, and executives characterized the restructuring as an extension of those efforts rather than a sudden shift toward automation.
Chief Executive C.S. Venkatakrishnan emphasized that AI represents one component of the bank's wider technology strategy.
"We will employ AI at scale," Venkatakrishnan said. "But AI is the icing on the cake, not the cake."
The restructuring is accompanied by additional spending on measures designed to lower future costs. Barclays recorded £201 million in structural cost actions during the third quarter, compared with £93 million in the same period last year. It expects to undertake another £300 million in cost measures during the final three months of 2026.
Cross said the bank's UK division has implemented more extensive structural cost changes this year than initially anticipated. Barclays intends to use the savings generated through organizational simplification and technology improvements to support further investment.
The company has also expanded its partnerships involving AI software. Earlier in October, Barclays announced a broader collaboration with Anthropic focused on applying artificial intelligence across its business, including software engineering and upgrades to older technology systems.
The agreement highlights an area where Barclays is simultaneously investing in AI capabilities and reducing headcount. Software developers are among the support employees affected by the restructuring, although the bank has not specified how many development positions will be eliminated.
The announcement follows a cost-reduction program introduced in early 2024, when Barclays established a target of £2 billion in savings by 2026. The bank also aimed to bring its cost-to-income ratio into the upper-50% range.
By the second quarter of 2026, that ratio had improved to 54%, compared with 59% a year earlier. Barclays previously indicated that stronger profitability during the first half of the year would allow it to accelerate restructuring in the second half and create greater flexibility in its expense base from 2027 onward.
The latest job cuts were announced alongside quarterly financial results that showed higher overall profitability but weaker performance in parts of the investment bank.
Barclays reported a 12% increase in third-quarter pre-tax profit to £2.3 billion, below analyst expectations of approximately £2.4 billion. Revenue from fixed-income and currency trading declined 19% to about £1 billion, missing forecasts of £1.3 billion.
The bank attributed the trading weakness to reduced customer activity in interest-rate and credit products, along with difficult macroeconomic conditions during September.
Equities trading provided a stronger result, with revenue climbing 47% from the previous year. However, total investment banking income of approximately £3.1 billion remained below the £3.3 billion analysts had anticipated.
Barclays' UK retail banking business was broadly stable, while its US consumer operations delivered little year-over-year growth. The company also announced a £500 million share buyback and maintained its existing financial targets.
The workforce reductions place Barclays among companies increasingly incorporating AI into restructuring decisions. Snap and Coinbase have also cited artificial intelligence in connection with job cuts, while JPMorgan CEO Jamie Dimon has suggested that banks may shift hiring toward employees with AI expertise.
Will Howlett, a financial analyst at Quilter Cheviot, said the announcement demonstrates the potential impact of automation on employment across financial services.
"The cuts illustrate just how significantly AI and automation could reshape the banking industry over the next few years," Howlett said.
For Barclays, the immediate objective is to complete its planned workforce reductions while continuing to modernize its operations. The bank expects the remaining job cuts to take effect by year-end, positioning its technology investments and lower staffing costs as important components of its longer-term efficiency strategy.
This analysis is based on reporting from Yahoo Finance courtesy of Bloomberg.
Image courtesy of Yahoo Finance UK (PA).
This article was generated with AI assistance and reviewed for accuracy and quality.
