Barclays CEO: job cuts driven by AI, calls it 'icing on the cake'
The 5,000 job cuts are part of a wider cost cutting drive that Barclays bosses said has been driven by advances in artificial intelligence.
The majority (60%) affect support roles.
The job cuts will mean getting rid of about 5% of the bank’s 93,000 global staff.
The bank’s chief financial officer, Anna Cross, told reporters that it was part of plans to save more than £1.1bn in 2027.
When asked how many of the total job cuts would be directly linked to AI, chief executive CS Venkatakrishnan said the bank had been making “deep investments” in technology and simplifying its processes.
He called AI the“icing on the cake” to modernising the bank’s technology.
The news comes months after another UK-headquartered bank, Standard Chartered, announced plans to cut more than 7,000 jobs over the next four years as it ramped up the use of AI. It will mean slashing around 15% of its back-office roles by 2030.
French 10-year bond yield tops US Treasury yield for first time since 2013
The French 10-year government bond yield has risen above the equivalent US Treasury yield for the first time since 2013.
The French yield, or interest rate, jumped 10 basis points to 5.09% this morning, while the 10-year US Treasury yield fell 4bps to 5.07%.
With higher oil prices stoking inflation fears and stock markets sliding today, investors are piling into US government bonds, which are considered ultra-safe. When bond prices rise, their yields fall.
While overall profits at Barclays jumped 12% to £2.3bn in the three months to September, analysts had expected an even better performance.
Income from fixed income trading slid 19%, worse than a 5% drop among US banks, after a global bond sell-off.
The bank’s chief executive CS Venkatakrishnan said:
A Barclays spokesperson sent us this comment about the 5,000 job cuts, which bosses said are driven by advances in artificial intelligence, which is making “our people more productive”.
One of the UK’s biggest banks, Barclays said it took “structural cost actions” to reduce its expenses by a further £201m in the third quarter, including bringing down staff costs through greater use of technology.
It is the first major European lender to report third-quarter results.
Barclays CEO: job cuts driven by AI, calls it 'icing on the cake'
The 5,000 job cuts are part of a wider cost cutting drive that Barclays bosses said has been driven by advances in artificial intelligence.
The majority (60%) affect support roles.
The job cuts will mean getting rid of about 5% of the bank’s 93,000 global staff.
The bank’s chief financial officer, Anna Cross, told reporters that it was part of plans to save more than £1.1bn in 2027.
When asked how many of the total job cuts would be directly linked to AI, chief executive CS Venkatakrishnan said the bank had been making “deep investments” in technology and simplifying its processes.
He called AI the“icing on the cake” to modernising the bank’s technology.
The news comes months after another UK-headquartered bank, Standard Chartered, announced plans to cut more than 7,000 jobs over the next four years as it ramped up the use of AI. It will mean slashing around 15% of its back-office roles by 2030.
Barclays says it is cutting 5,000 jobs
Barclays also said it is cutting 5,000 jobs, amounting to about 5% of its workforce, our banking correspondent Kalyeena Makortoff reports.
Its chief financial officer, Anna Cross, told journalists on a call that 1,000 of the job cuts have already been implemented, with another 4,000 to go before the end of the year.
The news was buried in this morning’s presentation, where the UK bank revealed higher profits of £2.3bn for the July to September period, up 12% on last year. It is handing a further £500m back to shareholders.
C. S. Venkatakrishnan, the chief executive, said that the bank’s cost to income ratio has improved from 63% to 62% in the last three months.
The Barclays share price fell 2.5% in early trading and is now up slightly. It has lost about a quarter of its value in the past three months.
The Barclays results come after reports on Monday that the Bank of England was examining whether Barclays traders had misrepresented illiquid private credit loans by using derivatives.
Barclays shares have fallen by 20% over the last three months, also pressured by the prospect of higher bank taxes in the upcoming budget.
Richard Hunter at interactive investor said:
Richard Hunter, head of markets at the trading platform interactive investor, said the Barclays results are a bit “a mixed bag which is unlikely to blow away the clouds which have been hovering over the sector”.
In the investment bank, which accounts for 42% of group revenues, the recent US experience of the large names was echoed, he noted. Equity income rose by 47%, but Fixed Income, Currencies and Commodities (FICC) was 19% lower, leading to an overall 4% gain. Investment banking fees and advisory rose by 13%, with other highlights coming from Barclays UK Corporate.
Hunter added:
Here’s our full story on Barclays:
Barclays is giving a further £500m to shareholders after reporting a jump in quarterly profits, as the lender steels itself for an increase in UK bank taxes at next week’s budget.
It comes only days before the chancellor, John Healey, is due to announce a hike on banks in the 28 October budget, as the prime minister Andy Burnham’s government looks for ways to raise revenue to help fund cost of living support programmes.
Barclays’ strong performance included a 6% rise in net interest income at its UK retail banking operations, to £2bn. The figure has become a flashpoint for campaigners pushing for a bank tax. It accounts for how much money banks make from loan charges, minus what they pay on deposits, and is linked to interest rates, which have been rising as the Iran war has driven up inflation expectations.
Barclays' bumper profits show need for bank windfall tax at budget, TUC says
Barclays third-quarter profits of £2.3bn – bring its profits so far this year to £8.4bn, up 15% on the year.
The TUC called the government for higher bank taxes, to fund a social energy tariff.
At the moment, the bank surcharge is an additional 3% corporation tax on the profits of banking companies above £100m. The Conservatives slashed the surcharge from 8% to 3% in 2023, just as interest rates were reaching their peak – a move that has cost the Treasury £6bn, the union body argued.
The TUC is calling for the government to increase the surcharge to raise up to £60bn over the next four years. Even just reversing the Tory cuts and setting it at 8% would raise £9bn over four years.
TUC general secretary Paul Nowak said:
Introduction: Barclays profits jump ahead of looming bank tax; French bond yields hit fresh 24-year high
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Barclays’ profits jumped in the last quarter and it handed more cash to shareholders as further bank taxes loom in John Healey’s budget next Wednesday.
The UK lender reported a 12% rise in pre-tax profits to £2.3bn for the three months to 30 September. Income rose 3% to £7.4bn, ahead of expectations. In the UK, loans grew 7% year on year with particular strength in its corporate business, up 14%.
It announced a new £500m share buyback, bringing the amount handed back to shareholders so far this year to £2.8bn, up 46% year on year.
C. S. Venkatakrishnan, the Barclays chief executive, said:
Barclays’ investment bank reported income of £3.1bn, lower than analysts had forecast. Income from fixed income trading slid 19%, worse than a 5% drop among US banks.
The TUC urged the chancellor to increase taxes on banks at next week’s budget.
The union body wants the government to use the money to pay for a social energy tariff that brings down energy bills by up to £559 a year for those on low and middle incomes.
Last week, when bank stocks were falling amid talk of a hike in UK bank taxes, Angeline Ong, senior technical analyst at investing and trading platform IG, noted:
In financial markets, the cost of French government borrowing has increased further, hitting multi-decade highs, and piling pressure on ministers after weeks of increasingly violent street protests.
The yield, or interest rate, on France’s 10-year bonds rose 4 basis points to 5.039%, the highest since July 2002, after breaking through the 5% mark on Wednesday.
The risk premium over German Bunds has widened to 163bps, the widest since November 2011, reflecting investor concerns over France’s fiscal outlook. The government has yet to pass its budget. (During the last financial crisis, the bond spread was 200bps).
Oil prices have climbed above $111 a barrel this morning, after more Houthi attacks in Saudi Arabia fuelled fears over an escalation of the Middle East conflict and further disruptions to supplies.
Brent crude, the global oil benchmark, is up 2.5% at $111.58 a barrel, raising fears of higher inflation, which puts pressure on bonds.
Asian stock markets slid, with Japan’s Nikkei down 2.65%, China’s CSI 300 losing 1.5% and South Korea’s Kospi tumbling 3.7%.
The Agenda
10am BST: UK index-linked gilt 2031 action
11am BST: UK CBI Industrial tends survey
11.50am BST: Bank of England governor Andrew Bailey speech
1.30pm BST: US Initial jobless claims for week of 17 October
3pm BST: Eurozone consumer confidence flash for October
3pm BST: US Conference Board leading index for September
