London, 24 October 2026 — EBM Weekend Read — By Nick Staunton
For three years, Europe’s boardrooms insisted that artificial intelligence would help their staff, not replace them. This week, that story changed. Barclays said it would have cut about 5,000 jobs by the end of the year, roughly 5% of its workforce. Chief executive CS Venkatakrishnan linked the cuts directly to the bank’s technology investment.
It was one of the clearest admissions yet from a major European employer that AI is now taking jobs. As EBM reported on Thursday, the bank’s profits rose 12% in the same quarter. Higher profits and fewer people: that is what AI looks like when it reaches the balance sheet. And Barclays will not be the last.
The Banks Go First
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SubscribeBanking is where the change is happening fastest, and the numbers are getting bigger. In May, Morgan Stanley doubled its forecast for AI-driven job losses at European banks, according to Bloomberg. It now expects up to 20% of the sector’s jobs, about 400,000 positions, to go by 2030.
The cuts are already under way:
- ABN Amro plans to cut about a fifth of its full-time staff by 2028, mainly through automation.
- HSBC has committed to about 20,000 job cuts, alongside its biggest senior banker cull since the financial crisis.
- UBS is cutting again in Switzerland.
- Société Générale’s chief executive has said that “nothing is sacred” in his cost programme.
Banks are natural first movers. They employ huge numbers of people to process information: checking documents, monitoring transactions, answering customer queries and producing reports. These are exactly the tasks large language models now do well and cheaply. Banks also face competition from digital challengers such as Revolut, which runs on a fraction of a traditional lender’s staff.
The Back Office Is the Front Line
The pattern across industries is now clear. The first jobs to go are not factory jobs, as earlier waves of automation took. They are routine, rules-based, white-collar roles:
- Operations and processing: payments, claims handling, data entry and reconciliation.
- Compliance checks: know-your-customer and anti-money-laundering reviews, much of which is pattern-matching.
- Customer service: chatbots and voice agents are replacing call-centre staff.
- Junior software development: Barclays said AI is reducing its need for some developers, and vibe coding is changing how software is built.
- Entry-level professional work: first drafts of research, legal documents, marketing copy and financial analysis.
What these roles share is that the work is done at a screen, follows predictable rules and is easy to check. The International Monetary Fund has estimated that about 60% of jobs in advanced economies are exposed to AI in some way, in a 2024 staff paper. Exposure does not mean elimination, but it shows where the pressure will fall.
The Bottom Rung Disappears
The most worrying effect may be on people who haven’t got a job yet. Graduate vacancies in Britain fell 45% in the year to July, to their lowest level since records began in 2016, according to job site Adzuna. More than a million 16- to 24-year-olds are not in education, employment or training.
AI is not the only cause. Higher employer national insurance, a rising minimum wage and a weak economy, made worse by inflation climbing to 3.5%, all play a part. But the junior tasks that once trained graduates are exactly what AI does best. If companies stop hiring at the bottom, they will struggle to find experienced staff in ten years’ time. This is a slow-burning problem that few boards have yet confronted.
Who Is Safe, For Now
The picture is not all bleak. The European Central Bank’s survey of about 5,000 eurozone firms found that AI has so far had no significant overall effect on job losses. Firms that use AI heavily, especially smaller ones, were actually slightly more likely to hire. Only 15% of companies using AI said cost-cutting was the main goal.
Jobs that need physical presence, human judgement or trust remain hard to automate. Skilled trades, construction, healthcare, teaching and hospitality are all in this group. Demand is growing for the people who build and run AI systems: data engineers, AI specialists and risk managers. The best results come from humans and AI working together, not from wholesale replacement.
Europe’s Safety Net, and Britain’s Exposure
Continental Europe has a buffer that America and Britain largely lack. In France, Germany, the Netherlands and Spain, works councils and collective bargaining make rapid mass redundancies difficult. Most banks plan to shrink through natural attrition, early retirement and hiring freezes rather than sackings. That slows the pain, but it also moves it onto the young, who simply never get hired.
Britain is more exposed. It has a more flexible labour market and an economy heavily weighted towards financial and professional services, the sectors most open to automation. The City, the Treasury’s biggest tax engine, is precisely where the cuts are landing first.
Who Gets the Gains
The money is flowing to two places: the technology companies and the shareholders who own the businesses that adopt it. Big Tech is spending staggering sums, with Meta alone committing up to $145bn this year. Banks are reporting rising profits. Workers are being asked to accept that the gains will eventually trickle down through cheaper services and new kinds of jobs.
That bargain is politically fragile. ECB economists already warn that the AI-fuelled stock boom is heading for a correction. If middle-class jobs disappear while profits soar, the backlash could be severe. With populist parties already on the rise, governments will come under pressure to tax AI gains, protect workers, or both.
The Bottom Line
The AI job cuts have begun, and they are starting exactly where the experts said they would: in the back offices of banks and in the junior roles that once launched careers. This is not yet a jobs apocalypse. The ECB’s evidence shows most companies are still hiring, and Europe’s labour laws will slow the pace. But the direction is now clear. Over the next five years, expect hundreds of thousands of routine white-collar jobs to disappear across European finance, insurance and professional services, mostly through jobs that are never refilled. The real danger is not mass unemployment but a lost generation of graduates who never get the first job that would have trained them. The companies that win will be those that use AI to make their people more productive, not just fewer. The governments that win will be those that rebuild the bottom rung of the career ladder before it disappears completely.
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