Barclays and PayPal among major names to confirm AI job cuts

Barclays and PayPal are just two of the major organizations to confirm significant job cuts in the last week, as AI is used to execute more processes. 

On October 22, Barclays confirmed it is to cut 5,000 staff roles across its UK retail banking operations as it looks to use AI to execute more processes. Amounting to five percent of the banking group's global workforce, 1,000 roles have already closed and a further 4,000 are expected to be cut by the end of this calendar year. 

On October 27, PayPal said that cutting 2,000 jobs has helped to keep it on track to achieve US$700 million in gross run-rate cost savings by the end of 2026. It has reduced managerial roles by 25 percent and is expanding its use of artificial intelligence, including AI-powered customer service agents.

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How much are organizations actually using AI?

Gartner predicts that AI spending will more than double by 2030 to reach $5.6 trillion, driven by new use cases and widespread availability, among other factors. 
But every positive outlook, appears to be countered with a negative. For example, MIT found the failure rate for enterprise generative AI solutions stood at 95 percent in 2025. 

AI's reach and the fast pace of adoption were evident in CX Network's annual research on the state of CX in 2026. Survey respondents were asked to select the three trends having the greatest impact on their work from a list of more than 25 choices. For the second consecutive year the most selected response was AI-powered technologies for operations. Selected by 24 percent of respondents, its ranking as the top trend confirms the broad role AI plays in CX, touching everything from data analysis to customer service. 

In second place was agentic AI and AI agents (21 percent), and AI-first customer journeys/ customers using AI for product research (17 percent) ranked third; two developments which, until recently, were not on the practitioners' radar.

What do AI-driven job cuts mean for customer service and CX quality?

In a statement, Chris de Souza, co-chair of the UK CX&AI Leadership Council, said the big question facing organizations in every sector is how to ensure that AI transformation delivers for customers, colleagues and businesses, not just the bottom line.

Commenting on the news from Barclays, he continued: "AI has real potential to improve customer service and deliver better outcomes. But cost reduction alone is not evidence of success. The real test is whether organizations can realize the benefits of AI while maintaining customer trust, access to human judgment and the quality of service people depend on."

Highlighting how the growing dependence on AI affects both those who lose their jobs and those who do not, he added that the future of customer service "must also keep routes into employment open and create pathways into the roles of tomorrow".

He concluded: "These decisions will shape employment, customer trust, service quality and long-term business performance. Customer experience and service must have a stronger voice in decisions that will affect all four."

AI is cited in job cuts beyond financial services 

The trend isn't confined to the financial services space. Even those who work for enterprise tech vendors – including AI developers – are in the crosshairs. 

Microsoft this week announced a "voluntary exit program" for more than 25 percent of its global workforce (approximately 60,000 people), as it targets stronger cost management and restructures operations amid ongoing and significant investments in AI. 

According to Layoffs.fyi, AI is increasingly cited as the reason organizations are cutting significant proportions of their workforces. 

This table shows that since Q1, 2025, the proportion of layoffs directly attributable to AI has steadily increased from one-third to four-fifths. 

Some of the B2C and enterprise tech organizations to confirm AI-related job cuts this year include: 

How much is AI to blame? 

In 2024, Klarna said it had developed a chatbot so powerful that it could do the work of 700 employees – and immediately started to reduce headcount through passive attrition. It shed more than 1,000 workers in the year before its big reveal by implementing a hiring freeze and replacing those who resigned with AI. The CEO said he had no plans to hire humans. 

However, less than a year later, Klarna was re-hiring human workers after it was forced to put engineers in customer-facing roles to deal with the service queries its AI was not equipped to manage.

Many saw Klarna's experience as a warning. But as the saying goes: "Those who cannot remember the past are condemned to repeat it". 

Those who have a longer-term outlook strike a balance: humans are on hand for the complex cases and next-generation tech for the repetitive. Others use AI to scale. They task human workers with addressing more contacts and equip them with more powerful tools. 

On how to plan for the transition to a workforce of human and AI agents, Dave Rennyson, CEO of SuccessKPI, wrote in this article for CX Network: "A contact center built around high-volume, routine inquiries should plan for real capacity change, whereas a center in a complex or growing segment is usually better served by using AI to handle volume it could never afford to staff than by cutting people." 

Quick links

• Is AI taking CX jobs?
• AI agent management: The new CX role you can't ignore
• CX under pressure: New tech, new threats, new mandate