Market Minute: October 23rd, 2026 -AI, Layoffs, and the Consumer Economy

Any regular reader will remember that I have always been focused on the aggregate level of employment because roughly 70% of the U.S. economy is driven by consumer spending. With that as a starting point, I read with tremendous interest that Barclays has reported plans to reduce its workforce by 5,000 people. More interesting still is that the company cited efficiencies driven by AI as allowing it to consider this significant cut.

There is a wide array of opinions surrounding AI, from the belief that it is the full-on boogeyman coming for your job to the opinion that your job will not be lost to AI, but may be lost to someone who knows how to leverage it. The Barclays announcement feels a bit more like the boogeyman option.

It is not my intent to say this is the start of a wave; however, that may just be the case. In past recessions, it always seemed like large companies were waiting for one company to announce layoffs, and then the gates flew open. While not AI-based, in 2006, I worked with the Chief Accountant at Knights of Columbus to usher in a new straight-through processing system for placing and booking securities trades. The impact wasn’t a reduction in workforce. Instead, it allowed us to repurpose the people who were dedicated to trade processing and settlement. The ultimate impact was a slowdown in hiring for operations roles.

AI, in its most benign setting, would seem to follow my straight-through processing example and slow the pace of hiring. If the Barclays layoffs are truly driven by technological efficiencies, those are 5,000 real people with jobs and bills…and discretionary spending. I think this is something that bears watching to see if more companies begin to announce layoffs driven by gains in technological efficiency.

I am sure there is more to come on this.

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