Barclays has announced a reduction of around 5,000 jobs and a profit of £2.3bn for the three months to September. The profit is higher than it was a year ago. Nevertheless, it falls a little short of the forecasts, and the investment analysts duly register their disappointment. Five thousand jobs can go; the return on capital must keep rising.
One thousand posts have already disappeared. Another 4,000 are to go by the end of the year, bringing the reduction to about 5% of the bank’s global workforce. Russ Mould, investment director at AJ Bell, describes Barclays as “reaching for the AI lever, expecting to cut a decent chunk of its workforce as it expands the use of artificial intelligence”. A decent chunk! From the investor’s desk, the prospect looks quite lovely.
The chief executive, CS Venkatakrishnan, supplies a useful clarification: “But AI is the icing on the cake not the cake.” Barclays is approaching the end of a three-year cost-cutting programme, concentrated on UK retail banking, although the investment bank is also affected. The programme was already under way; AI provides management with further means of carrying it out. Barclays expects its efficiency measures to deliver another £1.1bn in savings in 2027.
“Because you need to do the infrastructure build to get the benefits of AI,” Venkatakrishnan explains. Certainly, and this infrastructure requires workers to build it. Yet developers themselves are among those affected by the cuts; around 60 percent of the reductions will fall in support functions. The worker who constructs the machinery remains a wage-worker, however sophisticated the machinery becomes. Capital will dispense with that worker’s skills as readily as with anyone else’s when it can save the wage.
Will Howlett, an analyst at Quilter Cheviot, says investment in technology is translating into “fewer people being required to run the business”. Notice how readily the reduction of work becomes the reduction of workers. If the same operations take fewer hours, those hours can be shared and the working day shortened. But Barclays hasn’t invested in order to give its employees more leisure on the same pay. Its owners expect a return, and management obtains that return by cutting the expense of employing them.
A significant proportion of the cuts is expected to fall in India, where Barclays carries out some of the back-office work for its UK business. Workers in India help operate the British bank; they’re now to bear a substantial share of its economy measures. To demand merely that the cuts fall in another country would be to accept the bank’s programme and haggle over its victims. British and Indian workers have a common interest in resisting the destruction of jobs and fighting for shorter hours without loss of pay. Their organisation must reach across the borders which the bank’s business already crosses.
The shareholders’ ownership of the bank is the obstacle every such demand runs up against. They won’t surrender their claim on the savings because we demonstrate that shorter hours would be better for the workers. Concessions must be wrested from them through organised struggle. And that struggle must develop into a fight for power over the banks themselves, over the credit and investment through which the capitalist class directs the labour of society.
Under socialism, the banks would form part of a planned economy under working-class rule. A workers’ government would use reductions in the labour needed for banking to shorten working hours and arrange paid training for other socially necessary work, securing the livelihoods of those whose old tasks had disappeared. The workers would have every interest in developing and introducing better methods: each improvement could relieve their toil and release resources for other needs.
To establish this requires a social revolution. The working class must take state power, expropriate the banks and the great means of production, and put society’s resources to work for the common good. The technical knowledge exists. The workers already build and operate the systems. They must acquire the power to decide what those systems are for.
