Barclays will wield the axe on some 5,000 jobs in its global headcount as the firm ramps up its cost-cutting targets and leverages artificial intelligence.

The FTSE 100 bank’s reductions will cover five per cent of the group’s global workforce and are expected to be mainly concentrated in support functions, including developers.

“They’re across the bank and they are primarily related to operational and functional roles that service our business… it’s a result of the investments which we’ve made in technology over a number of years and which we’ll continue to make,” Barclays boss CS Venkatakrishnan, known as Venkat, said.

Around 1,000 roles were cut in the first half, the bank said, with the remaining balance to be cut in the third and fourth quarter.

Venkat said the use of AI in the firm was “the icing on the cake, not the cake”.

Barclays has set a target of over £2bn in total cost efficiency savings across the 2026 to 2028 period.

Barclays posts profit miss

It follows the bank missing profit expectations in the third-quarter after its investment bank lagged behind forecasts despite a boost on the trading desks.

The group reported a £2.3bn pre-tax profit for the three months to end September, narrowly missing internal consensus of a £2.4bn haul, though up 12 per cent year-on-year.

It came as total income at its investment bank – a key revenue-raising engine of the group – came in at £3.1bn, compared to a £3.3bn forecast. The division grew just one per cent from the same period in 2025.

Barclays’ equities division followed a similar pattern on Wall Street, soaring 47 per cent to £1bn on the back of the market volatility triggered by the US-Iran war.

But fixed income tumbled 19 per cent year-on-year to just over £1bn following lower client activity in rates and credit as well as macroeconomic headwinds.

Venkat has implemented an overhaul of the group’s investment bank as a key part of his multi-year strategy.

The bank chief is targeting bringing the division’s return on tangible equity (RoTE) in line with a broader group target of 12 per cent by the end of the year. RoTE is a key profitability ratio, measuring a company’s net income relative to the average value of a company’s common equity.

Barclays calm before the Budget storm

The investment bank recorded a 13.5 per cent RoTE for the year-to-date, up 60 basis points from the same period last year. Venkat laid out a target earlier this year to increase the group figure to above 14 per cent by 2028.

For the year-to-date, the group has recorded 13.8 per cent RoTE, up from 12.3 per cent the year prior. The firm launched a £500m share buyback on the back of the results.

The firm’s operating expenses reached £4.6bn for the period. The bank recorded £201m of Structural Cost Actions (SCAs), up from £93m, after the bank said it was able to reduce its cost base through “technology-enabled FTE [Full-Time Equivalent] reductions, creating capacity for further investment in the business”.

A further £300m of SCAs is earmarked for the fourth-quarter 2026, aiming to drive additional structural efficiency savings.

In Barclays’ UK retail banking division, income grew five per cent in the latest quarter to £1.8bn. This was supported by structural hedge earnings and a strong showing mortgage balance growth.

The update comes less than a week before Chancellor John Healey delivers his maiden Budget, where banks are expected to be target with a punishing tax raid.

Healey has faced fierce lobbying from the left of the Labour party and trade unions to slap higher taxes on the sector following the bumper profits reaped by industry this year.

The simplest lever available to Healey would be an increase to the banking surcharge that sits on top of corporation tax. The surcharge currently sits at three per cent after being reduced from eight per cent under Jeremy Hunt’s Chancellorship in 2023. A reversal of that move is understood to be under discussion, which would raise around £2bn a year.