Barclays Cuts 5,000 Jobs While Its CEO Downplays AI

Barclays plans to cut about 5,000 jobs by the end of 2026, about 5% of its staff, and named support teams and software developers among the roles going. Chief Executive C.S. Venkatakrishnan, known inside the bank as Venkat, called AI the icing on the cake the same morning the bank added a £500 million share buyback.

About 5,000 Jobs, and 60% in Support

The reduction is a full-year total, not a new wave from a standing start. The bank had already taken out 1,000 roles in the first half, and group finance director Anna Cross told analysts the moves in the third and fourth quarters are sizable. They mix organisational simplification with what she called some of the impacts the bank is starting to see from AI. The slides put the cut at circa 5,000 full-time employees, subject to collective and individual consultation.

THE 5,000-JOB PLAN

Cross said about 60% of the group actions sit in support functions, including fewer developers, as AI makes the people who stay more productive. Nowhere is that more relevant than in Barclays UK, she said, where the bank has taken more structural cost actions than it had planned for 2026. The investment bank is in scope too, though the UK retail operation has carried the bulk of the spend this year.

A large share is expected to land in India, where the bank runs back-office work for UK retail. That matches how the first AI-tagged cuts at large UK banks tend to fall: on work that was already moved offshore, not on the branch network that still carries the brand.

Venkat Calls AI the Icing on the Cake

Asked how many of the losses are directly tied to AI, Venkatakrishnan pointed instead to years of technology spending, simpler processes, and the need to standardise data and systems. Large UK banks still run on dozens of tech stacks, some of them decades old. He said those builds, not the models sitting on top of them, do most of the work.

We will employ the AI at scale. But AI is the icing on the cake not the cake. Because you need to do the infrastructure build to get the benefits of AI.

C.S. Venkatakrishnan, Group Chief Executive, to reporters

He also said AI has an important role now and may have a larger one later. The results slides still list organisational simplification and technology change with efficiency driven by AI as an outcome of the same structural cost actions. The public line and the investor deck are not the same pitch.

Third-quarter pretax profit rose 12% to £2.3 billion (about $3 billion), and income rose 3% to £7.4 billion. That was below analysts’ expectations of £2.42 billion. Equities revenue rose 47% to £1 billion and helped offset a 19% drop in fixed-income and currency trading, which Venkatakrishnan called somewhat disappointing. Return on tangible equity was 11.7% in the quarter and 13.8% for the first nine months. The cost-to-income ratio came in at 62% for the quarter and 57% year to date.

Why Developers Are on the Cut List?

Three weeks before the results, on 1 October, Anthropic said Barclays expects Claude Code, its coding tool, to reach 50% of its developer population by the end of 2026, then a majority of software engineers in 2027. Group co-chief operating officer Craig Bright said the bank is using Claude to modernise legacy platforms, lift software quality, and let technical experts spend time on harder problems. Group co-chief operating officer Anne Marie Darling said the test is what changes for customers, clients, and colleagues, not the fact of adopting a model.

The people who would run that build are also on the cut list. Support functions, developers among them, take about 60% of the group actions. The remaining engineers are being asked to write, test, and secure systems with an agentic coding tool while the headcount around them shrinks.

CLAUDE ALREADY INSIDE THE BANK

• Knowledge assistant: More than 16,000 Barclays UK colleagues have used the Claude-powered tool since 2025, with over one million searches, while serving more than 20 million UK retail customers.
• Markets email: Claude models classify and route about 120,000 client emails a day in Global Markets, so operations staff spend less time on manual sorting.
• Coding target: Half of developers are due on Claude Code by the end of 2026, and most software engineers during 2027.

Paul Smith, Anthropic’s chief commercial officer, called the work a milestone for the firm in the UK and said Claude will be in the hands of most Barclays engineers by 2027. The bank says it keeps human oversight on those uses. Oversight still needs people who know the old platforms well enough to catch a bad change, and those people are getting fewer.

A £500 Million Buyback on the Same Morning

Venkatakrishnan opened the analyst call by saying he was pleased with year-to-date performance. The CET1 ratio stood at 14.2%, or 14.0% after the new buyback, and that capital, he said, supports another return of cash. Year-to-date distributions rise to £2.8 billion with this tranche, up 46% from the same stretch last year.

CASH SENT THE OTHER WAY

• New buyback: £500 million announced with the third-quarter numbers.
• Paid so far in 2026: £2.8 billion, including £0.8 billion of dividends and £2.0 billion of buybacks before this latest slice is complete.
• Since 2023: £5.8 billion of buybacks, with the share count down 12%.
• Plan total: £10.7 billion of distributions announced since the three-year plan began, before any fourth-quarter buyback, including a planned £2 billion dividend for 2026.

Angelo Di Cristo, who leads the finance sector at UNI Global Union, said Unite is right that AI is an excuse and not the cause, and he put the buyback and the headcount cut on the same date. Earnings per share rose 18% year on year in the third quarter. The bank is on its way to a third year of about 20% EPS growth, helped by a smaller share count as well as by income.

That is the split the numbers actually show. Staff in support and in software take the reduction. Holders of the equity take a larger cash return than they did a year earlier. AI is the language that joins those two facts in the deck.

The UK Retail Bank Carries Most of the Cost Drive

Cross said the past two years delivered about £0.7 billion of gross efficiency savings a year, after about £0.3 billion of structural cost actions in the prior year. That had been the planning assumption for 2026 through 2028. Having raised the 2026 spend, the bank now expects more than £1.1 billion of gross efficiency savings in 2027. It booked £201 million of structural cost actions in the third quarter and £307 million in the first nine months, and it expects about £300 million more in the fourth quarter.

Barclays UK took £110 million of those actions in the third quarter, which Cross said accounted for the whole of a 6% rise in that division’s costs. She no longer expects UK costs to fall in 2026 against 2025, and she is more confident about getting 2027 and 2028 below the 2025 level. Customer-facing technology has cut call-centre volumes by 10% in the past year, she said, and changes in the branch staffing model have cut employees per branch by about 10%, with remaining colleagues steered toward higher-value support.

FROM THE CLAUDE DEAL TO THE TOWN HALL

1. 1 October 2026: Anthropic publishes the expanded Claude rollout, including the developer adoption targets and the live knowledge and email tools.
2. First half of 2026: 1,000 roles already leave as structural cost actions begin to run ahead of the original plan.
3. 22 October 2026: Third-quarter results, the 5,000-job figure, and the £500 million buyback land together. Tesco Bank synergies of about £0.2 billion are still feeding through after the 2024 deal, mostly in 2027 and 2028.
4. 23 October 2026: Venkatakrishnan tells a staff town hall that managers must hire from inside first, and that the bank will push down its use of third-party providers.

One quarter remains in the original three-year plan, Cross said, and she is confident on the group targets. UK lending grew 7% year on year. Around 45% of UK corporate clients now use iPortal, the digital platform that replaced five older ones, and the bank expects that to reach 100% by the end of 2026. The UK businesses each printed a return on tangible equity above 20% in the third quarter. The cost programme is being accelerated on top of a franchise that is already throwing off cash.

Talks Open on Retraining Instead of Exits

Unite, which represents staff in the sector, did not wait for the town hall. General secretary Sharon Graham said the bank should be upgrading skills so people stay employed as tools change, and she called the approach short-term.

Barclays workers deserve better than this. The company is using AI as an excuse to discard its loyal and long-suffering workforce.

Sharon Graham, General Secretary, Unite

The same objection ran through the public argument after the results: these are ordinary layoffs with an AI label, and Barclays was the large bank that tied its cuts explicitly to efficiency from the technology. Rick Coyle, Unite’s national officer for finance, said the union is in urgent talks and that, as part of the Financial Service Skills Compact, the bank should not be cutting jobs. Unite’s written line is that technology has to happen with workers, not to them, and that efficiency cannot exist only to pad profits.

Graham’s charge that the bank is using AI as an excuse to discard staff sits next to Venkatakrishnan’s own icing line. He told reporters the models are not the cake. The slides still count fewer developers as a product of AI. Both statements are on the record from 22 October.

Hiring Managers Must Look Inside the Bank First

A day after the results, Venkatakrishnan faced staff questions and told hiring managers to prefer internal candidates even where they lack experience or some of the listed skills. He said the bank will make a concerted effort to reduce reliance on third-party providers, and that in certain areas there will be fewer jobs than there are now.

Technology is evolving, he said, and the bank cannot run away from it or hide from it. Shareholders will not let that happen. He asked to see the full set of reskilling programmes the bank has in mind. A spokesman said Barclays is positioning itself for the future and is committed to helping colleagues build careers while the needs of customers change. The bank also said it is investing £150 million in colleagues’ future skills by 2030, with 40,000 colleagues already having used its AI learning, which is open to all, and with tailored career support for people hit by the changes.

The remaining 4,000 roles are due to go before the end of December, still subject to consultation. Internal moves can soften some of those exits. They do not change the target Cross put on the call, or the fact that support teams and developers are named inside it.