British lender Barclays on Thursday, October 22, said it is cutting its staff by around 5,000 – nearly 5 per cent of its total workforce – as it introduces more artificial intelligence (AI) into its work processes.
As per the official details, it has already closed 1,000 posts, while a further reduction of 4,000 is expected to be completed by the end of this year, BBC reported.
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Its cost reductions remain focused on its UK retail bank, but some back office functions for the UK are done in India, where a significant proportion of the job cuts are expected to fall, the report added.
Officials said that they major changed were the result of an ongoing modernisation plan, with the use of AI being the “icing on the cake” of its strategy.
The group is nearing the end of a three year cost-cutting programme that remains focused primarily on its UK retail banking arm, although the investment banking division is also affected.
In its third-quarter earnings statement, the group noted that it was “structurally reducing the cost base to generate capacity for investment.”
Also, it was revealed that it made £2.3 billion profit in the three months to September, higher than the same period a year ago, but slightly less than forecast.
As per reports, about 60% of the job cuts were expected to be in support functions, including developers. The earnings presentation also noted an outcome was “organisational simplification and technology change efficiency driven by AI.”
Barclays Group chief executive CS Venkatakrishnan said the job cuts were the result of significant investment the group has been making in technology to simplify and improve its business. “AI has an important role to play and may have a more important role to play in the future… We will employ the AI at scale. But AI is the icing on the cake not the cake,” he said.
He added, “Because you need to do the infrastructure build to get the benefits of AI.”
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