London (AFP) – British bank Barclays announced Thursday plans to cut around 5,000 jobs, or roughly five percent of its global workforce, by the end of 2026 in an AI efficiency drive. The announcement came alongside an earnings update that showed Barclays’ net profit grew 13 percent in the third quarter, fuelled by surging income across its equities division.
Barclays said in an earnings presentation that it was implementing “organisational simplification and technology change efficiency driven by AI.” “About 60 percent of the job losses relate to support functions, including fewer developers as AI makes our people more productive,” it added. The bank’s profit after tax grew to £1.65 billion ($2.2 billion) in the third quarter from £1.46 billion in the July-September period a year earlier.
Barclays chief executive C. S. Venkatakrishnan noted “ongoing momentum of…operational and financial performance” and said the investment bank division “delivered strong equities performance.” Revenue from equities jumped 47 percent year-on-year, while total group income for the quarter climbed three percent to £7.37 billion. Barclays’ share price was up slightly following the news updates.
The AI announcement comes as the company failed to match expectations with its third-quarter performance — with the unveiling of a healthy share buyback failing to entirely ease investors’ disappointment, noted AJ Bell investment director Russ Mould.
“Across the wider group, costs went up and Barclays shareholders are also having to contend with two major clouds over the business. The first being a widely expected increase in tax on the sector in next week’s (UK) budget and the other being a reported probe into possible misrepresentation of risks in its private credit portfolio.”
© 2024 AFP
