Barclays CEO: job cuts driven by AI, calls it 'icing on the cake'

Kalyeena Makortoff

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.

These actions involve an expected reduction of circa 5000 full time employees, around 60% of the group actions relate to support functions, including theory developers. AI makes our people more productive.

A Barclays Bank on the King’s Road in London in January. Photograph: John Keeble/Getty Images

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.

That is driving the bulk of the efficiency gains that you’ve seen so far. AI has an important role to play and may have a more important role to play in the future.

He called AI the“icing on the cake” to modernising the bank’s technology.

We have been focusing on the infrastructure build, and where the infrastructure is modern, we’ve been applying AI.

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.

Key events

John Healey says helping entrepreneurs will be a budget priority

A week today John Healey, the chancellor, will be doing a media round defending the budget he is presenting on Wednesday next week.

Ahead of that, he has given an interview to Patrick Maguire from the Times. As you would expect, there is no real detail in it about the measures he will be presenting to MPs.

But the big picture message is very clear – and quite surprising, coming from a chancellor serving a PM who in some respects is steering left compared to his predecessor, writes the Guardian’s political correspondent Andrew Sparrow.

Healey says that he wants to be on the side of bloody-minded entrepreneurs who make a profit, he acknowledges that government has made their life harder over the past two years, and he suggests that cutting the ‘cost of living’ for business is just as important as cutting the real cost of living for families.

In the quote that gives the Times its splash headline, Healey says:

I want to be a chancellor who backs business in Britain making a profit, and those entrepreneurs who, in the end, are the ones who challenge the status quo, come up with innovative ideas and are trying, some of them through sheer bloody-mindedness, to keep going through these sorts of pressures …

If you’re not making a profit, you’ve got nothing to put back into the business. And for the people who start up these businesses, the ones who really thrive and grow, they have to make a profit — and they will be much more inclined to put it back into their own business. But we want it to grow here and stay here.

You can follow the latest on our politics live blog with Andrew Sparrow here:

Sainsbury's says households 'finding it tough' in run-up to Christmas

Sainsbury’s has warned of a “pretty challenging” market in the run-up to Christmas as households are “finding it tough” and food producers face rising costs.

Simon Roberts, the chief executive of the UK’s second biggest supermarket, called on the government not to “further aggravate” pressure on costs for business in this month’s budget.

He said it was “important this government does not repeat what we have seen in previous budgets” in raising business rates and employers’ national insurance contributions. “That’s been really hard,” he said.

After Sainsbury’s and other industry leaders met government ministers last week, Roberts said he believed “this government is really listening to business” especially on helping to create more jobs for young people.

Roberts added that food inflation was not “anything like” some of the high levels forecast earlier in the year but suggested high energy and fertiliser costs could push up food prices next year.

Roberts added that in a more unsettled global environment the UK needed to “improve food resilience and grow and produce more at home”. He called on the government to increase tax breaks that support investment in technology – including irrigation and reservoirs – on farms as the climate crisis is expected to lead to more hotter, drier summers such as this year’s.

Shares in Sainsbury’s slid 3.7% as the retailer revealed slower than expected sales growth of 2.6% in the six months to 12 September, with growth almost halving to 1.9% in the second quarter from 3% in the first. Strong online grocery sales – up 9% – and a 6% rise in sales of the retailer’s premium own-label Taste the Difference range helped with growth.

Roberts said sales had slowed as shoppers had kept a tight rein on the number of items they bought amid a “focus on the cost of living” and had reined in spending on clothing and “big-ticket” items, such as furniture, at Argos. Sales at the catalogue shop were down 1.8% and Sainsbury’s general merchandise and clothing sales were down 3.4% in the half.

Barclays boss backs UK chancellor over expected bank tax hikes

Barclays’ CEO seems to have admitted defeat over bank tax hikes, which are expected to be a headline measure in John Healey’s budget next Wednesday.

When asked whether the bank might consider tilting assets or investment out of the UK and to the US - where it also has operations - as a result of higher taxes , Barclays chief executive CS Venkatakrishnan gave his full backing to the chancellor.

He told reporters:

I recognise that the chancellor and the government has been entrusted with an important duty by the public and the people. And they have to balance a host of considerations. He [Healey] is the man in the arena, and I deeply respect the responsibility he bears on his shoulders and wish him well.

His long term goal is the same as our long term goal, which is to get growth.

Second, we are already a bank, which makes, effectively, half of our money elsewhere [ outside] the UK. And so this is not a question of a financial hit to us. It’s bearable. It is a question of proportion and it’s a question of market signaling. But as I said, I deeply respect the responsibility that the chancellor has and he has our full support and backing.

Bank bosses have been lobbying intensively against bank tax rises since narrowly escaping higher levies during last year’s budget.

That includes JP Morgan boss Jamie Dimon, who said earlier this year he could scrap plans for a new £3bn London headquarters if the UK government became hostile to banks. News of the tower – which will house more than half of its 23,000 UK staff – was unveiled just days after former Labour chancellor Rachel Reeves spared the sector of further tax rises in her 2025 autumn budget.

Lorry drivers' blockades bring southern Italy to standstill

French president Emmanuel Macron isn’t the only European leader to be holding emergency meetings.

As lorry drivers’ protests bring much of southern Italy to a standstill amid food and fuel shortages, with businesses warning they are on the brink of collapse, Italian authorities have launched a police crackdown on road blockades, reports our man in Palermo, Lorenzo Tondo.

The interior ministry said on Wednesday that 1,339 protesters had been identified, 71 reported to judicial authorities and 242 fined over what it described as “illegal road blockades”. Police escorted hundreds of vehicles carrying goods, including 500 in Campania alone, while the interior minister, Matteo Piantedosi, warned of possible infiltration by criminal groups.

Industry associations in Campania and Puglia warned that businesses were on the brink of collapse, prompting the prime minister, Giorgia Meloni, to convene an emergency cabinet meeting.

Massimiliano (Max) Bastoni at the Futuro Nazionale protest in Via Torino on 20 October following the attacks on businesses last weekend, Milan. Photograph: Nicola Marfisi/AGF/Shutterstock

Industry associations representing Naples and other parts of Campania and Puglia said in a joint statement:

The truckers’ dispute requires an immediate response. Production has ground to a halt due to a lack of supplies. The strike must end; otherwise, the damage to consumers and businesses, which is already significant, will become unsustainable.

The protests began last week, with lorry drivers blocking roads and slowing traffic across the country, particularly in the south, following strikes and sit-ins by farmers and fishers.

The disruption has left supermarket shelves empty in several regions, with photographs showing entire aisles stripped of goods. Stocks at some supermarket chains have reportedly fallen to 50% of normal levels.

Italy’s air traffic management agency, ENAV, said on Wednesday that Crotone and Reggio Calabria airports had run out of jet fuel because of supply disruptions.

According to estimates gathered by Confcommercio Sicilia, the five-day disruption to freight transport has caused between €40m and €50m in losses in Sicily alone, affecting supermarkets and the wider fresh food supply chain.

The protests threaten to deepen the crisis facing Meloni’s government, which is struggling to contain the unrest. Measures announced so far by Rome appear to have done little to appease lorry drivers, prompting the government to take the controversial step of attempting to quell the protests through a police crackdown.

The ongoing protests in France create a vicious circle, ING’s senior economist Charlotte de Montpellier warned.

The yield on 10-year French government bonds OATs has crossed the symbolic 5% threshold, while the spread over the German Bund has widened beyond 160 basis points, from 137bps last Friday.

These moves reflect both growing doubts about the ability of any future government to pass the necessary reforms and savings measures, and mounting concerns about the outlook for the French economy.

At the same time, the renewed deterioration in financial conditions is further weakening an already very poor growth outlook by increasing the cost of credit.

ING is forecasting GDP growth of just 0.3% in 2026 and 0.6% in 2027, but the risks are tilted towards another downward revision. De Montpellier added:

Against this backdrop, the government’s objective of reducing the deficit to 5% of GDP in 2027 looks particularly fragile, as it is based on growth of 0.5% in 2026 and 1% in 2027, well above our forecast. Even if the draft budget were adopted in full, it might therefore not be enough, as weaker activity would automatically reduce the expected tax revenues.

French business confidence improves but unrest clouds outlook, with more protests planned

French business confidence unexpectedly improved in October, but this does not capture the impact of the latest social unrest, while higher interest rates, a weak labour market and worsening public finances are clouding the outlook further.

A closely-watched business confidence index edged up by one point to 97, but remains below its long-term average.

The main surprise came from industry. The manufacturing business climate index rose to 105 in October 2026, above market expectations and 101 in September, marking its highest level since July 2022. The improvement was driven mainly by overall order books, although they stayed negative (-11 vs -16 in September) and foreign order books (-1 vs -10), with the latter reaching its highest level since April 2022.

In the services sector, the business climate indicator rose one point to 99.

On prices, Charlotte de Montpellier, senior economist covering France and Switzerland at ING, noted that the survey provided no new inflationary signal. Intentions to raise prices declined in industry and remained stable in both services and construction. The employment climate indicator fell three points to 95, as hiring intentions worsened in the services sector.

The rebound is encouraging, especially after several months of disappointing industrial data. But it does not fundamentally alter the outlook. The indicator of perceived economic uncertainty rose sharply. In services, it even reached its highest level outside the Covid-19 crisis.

The survey was conducted between late September and early October. It captures the widening in French bond spreads, but not the violence and social unrest seen last weekend. “October’s rebound is encouraging, but fragile and already partly overtaken by events,” de Montpellier said.

The nature of the risk has changed. It no longer relates only to weak activity and the impact of higher interest rates, but also to the economic, political and financial consequences of social unrest.

The economic cost of the violence is not limited to broken shop windows and looting. Material damage represents only the most visible part of the bill. Closures, lower footfall and permanently lost sales could weigh far more heavily on activity.

But the real issue is persistence. A brief and localised episode would probably have a limited macroeconomic impact, while prolonged unrest could undermine confidence by encouraging households to avoid city centres, tourists to postpone their trips and businesses to delay investment. This could turn a temporary disruption into a more lasting economic shock.

The unrest also makes it even more difficult to secure parliamentary approval for the budget, at a time when the government has virtually no room to respond through additional spending or tax cuts. France therefore has neither the fiscal room to buy social peace nor the political room to impose the necessary adjustment easily.

More protests are planned this weekend, and the French president Emmanuel Macron – back from his tour of the Gulf – is hosting a security council meeting to try and put out the fires at home.

We’ve launched a fun (??) game – you can pretend to be the UK chancellor and play the budget game to see if you can balance the books.

See if you can do a better job than John Healey at creating a budget that keeps MPs and the bond markets onside.

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.

Oil prices keep rising. Brent crude is now trading 3.3% higher on the day, up $3.6 to $112.38 a barrel.

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:

I am disappointed and you can be sure this will get my attention.

A Barclays spokesperson sent us this comment about the 5,000 job cuts, which bosses said are driven by advances in artificial intelligence, adding that greater use of technology makes “our people more productive”.

We are positioning Barclays for the future, building the workforce and skills needed to deliver our strategy and meet the evolving needs of our customers and clients. In doing so we are committed to helping our colleagues develop and build rewarding careers, while meeting the changing needs of customers and clients and ensuring Barclays continues to succeed in the years ahead.

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.

These actions involve an expected reduction of circa 5000 full time employees, around 60% of the group actions relate to support functions, including theory developers. AI makes our people more productive.

A Barclays Bank on the King’s Road in London in January. Photograph: John Keeble/Getty Images

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.

That is driving the bulk of the efficiency gains that you’ve seen so far. AI has an important role to play and may have a more important role to play in the future.

He called AI the“icing on the cake” to modernising the bank’s technology.

We have been focusing on the infrastructure build, and where the infrastructure is modern, we’ve been applying AI.

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:

Indeed, the UK banks have an additional hurdle to overcome in the form of the imminent budget. The sector has underperformed so far this year on a number of concerns, one of which is the bank surcharge. One market estimate suggests that the bank surcharge will be returned to 8% from the current 3% which in turn would reduce earnings by a possible 6%, although whatever the outcome some of the uncertainty which has been overhanging the banks would be removed.

On balance, these concerns have blemished the investor confidence which was clearly in evidence at the interim results, even though the longer-term picture remains solid and where Barclays has maintained its guidance for this year and next. Prospects for its three largest units, the Investment Bank, Barclays UK and Barclays US Consumer Bank are the main drivers and it may yet emerge that this quarter’s slightly uninspiring update is a blip rather than establishing a weaker trend.

Despite the quarterly share price weakness and the heightened expectations which have resulted in a weaker opening price today, the direction of travel remains intact, with the shares having posted a gain of 15% over the last year, as compared to a hike of 13% for the wider FTSE100. Over the last two years, the price is ahead by 74% and there seems little doubt that the group’s financial strength, alongside its geographical and business diversity are factors which keeps the stock in demand among investors, such that the market consensus of the shares as a buy should remain untroubled.

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:

A cautious impairment provision of £500m was 20% lower than the previous year, with defaults remaining stable and far from ringing any alarm bells.

More broadly, the group reiterated its financial muscle with a further £500m share buyback, in addition to the £1bn announced at the interim results. This is part of the group’s ambitious aim of £10bn of returns between 2024 and 2026, and then £15bn of returns between 2026 and 2028.

At a more granular level, there are pockets which may raise the eyebrows of some investors. The US Consumer Bank saw income decline by 1%… although the numbers were muddied by the inclusion of Best Egg numbers, which Barclays acquired in May for £600m. Barclays UK saw income growth of 4% largely due to the impact of the structural hedge, but numbers were contained by ongoing investment into its wealth proposition, where income nonetheless managed a 10% gain.

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:

Barclays’ bumper profits aren’t an anomaly. All the big banks are doing exceptionally well at the same time – but their windfall profits have been underpinned by mortgage misery for millions. That’s why it’s time for banks to pay a fairer share.

At a time when the chancellor needs to raise more revenue to support households and businesses through a looming energy bill crunch, Britain’s big four banks have made £200bn in profit since 2021. They can - and should - pay more tax.

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:

I am pleased with the ongoing momentum of Barclays’ operational and financial performance.

With one quarter to go before the end of our original three-year plan, we have either achieved or are on track to achieve all of our 2026 group targets. We are confident in and committed to the 2028 targets that we laid out earlier in the year.

The investment bank delivered strong equities performance, offsetting a challenging environment for FICC [Fixed Income, Currencies and Commodities].

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:

A UK bank tax risk is now a base case. If it is confirmed on 28 October, it’ll be the size and timing that will be key. If Healey does go ahead, shares of Lloyds and NatWest, which are almost entirely exposed to the UK, would likely be impacted most, and you are seeing this already in the share price reaction today. Barclays is partly exposed. HSBC is least exposed in the mix.

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