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By Hugh Cameron
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Discussions of automation-related layoffs and the labor market implications of AI integration have often centered on the blue-collar vocations and entry-level workers who could suffer as a result.
A Senate report last year found that 100 million American jobs could be at risk, with the most vulnerable to replacement being roles like fast-food servers, customer service representatives, and warehouse workers.
However, monthly layoff estimates from the outplacement firm Challenger, Gray & Christmas show that AI is increasingly an economy-wide threat. As of September, it has been referenced in 21 percent of all job cut announcements, and remains the most-cited reason for 2026.
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And Thursday saw more proof that few roles are entirely spared, as the banking group Barclays announced it would be cutting 5,000 jobs as it ramps up AI adoption. Barclays said the headcount reduction—which represents around 5 percent of its workforce—was already underway, with 1,000 roles axed, amid what CEO C. S. Venkatakrishnan said was the strategy of employing “AI at scale.”
“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,” a spokesperson for the group told Newsweek.
Why Is Barclays Doing This?
When asked for comment, the company said the cuts would be worldwide and touted the potential financial benefits—£1.1 billion ($1.5 billion) in gross efficiency savings next year.
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In an earnings call, Barclays executives said that 60 percent of the cuts would concern “support functions,” meaning “fewer developers as AI makes our people more productive.” It said that these changes would be most significantly felt in its United Kingdom arm.
How Significant Is the Announcement?
The CEO said this related to the “deep investments” it had made in “modernizing” and “harmonizing our systems” to more fully integrate AI into the group’s operations. And banks beyond Barclays have spent years pouring resources into AI—a bet that the technology could one day deliver higher productivity at lower cost.
“The Barclays announcement is of course significant, and provides an indication that investment in AI is beginning to influence employment decisions in banking,” said Carsten Maple, a professor of Cyber Systems Engineering at the University of Warwick and a fellow at the Alan Turing Institute.
However, Maple told Newsweek that it would be mistaken to attribute all 5,000 job cuts to AI, as Barclays “is undertaking a wide programme of cost reduction and technology modernization.”
Barclays’s Chief Executive himself described AI as “the icing on the cake, not the cake”—an idea that has been used in criticism of Barclays this week.
In a statement on Thursday, Sharon Graham, general secretary of the union which represents workers in the banking sector, said Barclays had used the tech as an “excuse to discard its loyal and long-suffering workforce.”
“Employers should be focused on upgrading employees' skills so that they remain employed as new technology changes the workplace,” the statement read. “Instead, Barclays is guilty of taking a short-term, kneejerk approach. Unite is working with its members to find the best way forward to reset this destructive announcement.”
When approached by Newsweek, Barclays noted that it had made several such investments, including a £150 million ($201 million) investment “in our colleagues’ future skills by 2030.”
What all three—the company, union and the analyst—acknowledge, however, is that AI will have a significant influence over the banking sector in the years to come.
“Unite recognizes the need to embrace new technologies as industries evolve,” Graham said. “However, these changes must never come at the expense of good, meaningful, skilled jobs.”
“I am convinced that AI will change employment in most sectors, and that the change will be rapid,” Maple told Newsweek. “But it is important that decisions are made with care.”
A Structural Shift?
Following on from the bank’s results, the podcast Daily Market Download asked: “Are these AI-driven headcount reductions just a temporary band-aid to protect dividends during weak trading quarters, or is this a permanent structural shift for the entire banking industry?”
And an overview of the wider sector reveals that the layoffs implemented by Barclays could be an indication of how AI will impact—and has already affected—the global banking industry.
Late last year, Morgan Stanley warned that over 200,000 banking sector jobs in Europe could be at risk over the next five years as lenders lean into AI adoption.
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The Barclays news comes only a month after Standard Chartered said it would be cutting 7,000 roles over the next four years amid its own AI push.
And earlier this month, Bloomberg reported that HSBC would be cutting roughly half of its management and specialist positions in its UK wealth division. Bloomberg also said, citing sources familiar with the plans, that the bank would be reducing its financial adviser headcount by 70 percent, and that this was all “part of a broader push to use artificial intelligence to serve affluent clients more efficiently.”
“One interesting aspect is the range of jobs affected. Most of the earlier discussion about AI replacing employees concerned routine, administrative and entry-level roles,” said Maple. “However, it is becoming evident that more specialist activities, including software development and analysis, are also being increasingly automated.
“I think it is increasingly important to consider which activities AI can undertake, rather than assuming that certain levels of seniority are protected.”
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Ben Kelly, Gray R. Thomas
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