Banking giant Barclays has unveiled plans to cut around 5,000 jobs this year, equivalent to roughly 5% of its global workforce, as it accelerates the use of AI and other technology to reduce costs and boost efficiency.

The job cuts are expected to fall mainly on support and operational functions, including technology-related roles, with executives saying the reductions are linked to years of investment in automation and AI. Around 1,000 positions have already been removed, with the remainder expected to go by the end of the year.

The announcement came alongside third-quarter results that showed profits rising, but falling slightly short of market expectations.

The lender reported pre-tax profit of £2.3 bn for the three months to September, up 12% from a year earlier, while group income reached £7.4bn.

There was strong performance in the equities segment, where total income rose 47% to £1bn, reflecting prior investment in prime financing and equity derivatives. This helped to offset a 19% drop in income to £1bn in FICC (Fixed Income, Currencies, and Commodities), on the back of lower client activity in rates and credit into the second half of the quarter, and "further adversity" in September due to the macroeconomic environment.

Barclays also announced a £500m share buyback.

For consumers and personal finance customers, the results showed the resilience of Barclays' UK retail banking business. Higher borrowing costs continue to support earnings, with the bank's UK net interest margin edging up to 3.69%, helping drive stronger income across its high street operations.

However, investors focused on weaker-than-expected investment banking income and the scale of the planned workforce reductions.

With Barclays the first major UK bank to report this earnings season, investors and consumers will be watching closely as the growing adoption of AI is beginning to reshape employment across the financial sector.

Russ Mould, investment director at AJ Bell, said: "Barclays is reaching for the AI lever, expecting to cut a decent chunk of its workforce as it expands the use of artificial intelligence across its operations.

"Barclays is an outlier compared with UK counterparts Lloyds and NatWest thanks to its meaningful investment banking presence.

"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 Autumn Budget and the other being a reported probe into possible misrepresentation of risks in its private credit portfolio."

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