Layoffs are occurring at British banks at the quickest rate since 2018.
In 2024, the digital push and the emergence of challenger banks have led to a significant reduction in the workforce of UK lenders, marking the steepest decline since 2018. British banks have reduced their staff by around 5.25%, bringing the number of employees to the lowest level in a decade [1].
Major banks such as HSBC and Standard Chartered have led the job cuts, with HSBC reducing its workforce by 4.3% and Standard Chartered by 4.5% [1][2]. HSBC specifically targeted investment bankers as part of a broader operational overhaul, including a potential exit from parts of its investment banking business in the UK, US, and Europe [1][2]. Lloyds also placed thousands of roles under review to modernize and strengthen its digital engineering teams [1].
The extensive closure of physical branches (6,300 sites over the past decade) further reflects the digital transition. In 2025 alone, over 370 branches are planned for closure, led by Lloyds-owned Halifax and Santander [2]. This branch rationalization is a direct response to digital banking trends and the need to compete with digital-only challengers who have minimal physical infrastructure costs.
Barclays is a notable exception among big banks in 2024, maintaining its overall headcount but still trimming over 200 investment banking jobs (about 3% of that division) to concentrate resources on priority growth areas like equity capital markets and M&A in tech and energy sectors [2][3].
The pressure from challenger banks with advanced technology and lower physical presence has forced traditional UK banks to aggressively cut headcount, focusing on reducing costly legacy roles such as investment bankers and branch staff while simultaneously investing in technology and AI to modernize operations and improve customer experience [1][2].
HSBC, despite being Europe's biggest lender, narrowly missed out on a top spot, sitting at 11th place in the global ranking. British banks were left out of the top ten of a global ranking tracking the financial strength of the world's banks for a second year running in 2024 [4]. The total employee numbers at British lenders dropped by 5.25% to 580,371 in 2024, marking the steepest drop since 2018 [4].
William Howlett, a financial analyst at Quilter Cheviot, commented on the cost-cutting cycle and the investment in tech and AI, stating, "The digital shift is both a cause of and a partial mitigation to workforce reductions, enabling banks to streamline and enhance efficiency amid a competitive and evolving financial landscape" [5].
Not a single UK lender made it into the top ten of The Banker's Top 1000 World Banks [4]. The overall number of banks on The Banker's global ranking has reduced to 22 from 26, due to takeovers such as Nationwide acquiring Virgin Money and Barclays acquiring Tesco Bank [6].
Banks continue to invest in technology and AI with the aim of streamlining and modernizing technology, improving customer experiences, improving risk management, and fraud detection. This strategic move is expected to continue shaping the UK banking sector in the coming years.
Sources: [1] BBC News, "HSBC to cut 4,500 jobs as it restructures global business", 2024 [2] The Guardian, "Lloyds Bank to cut thousands of jobs as it modernises digital banking", 2024 [3] Financial Times, "Barclays to cut 200 jobs in investment banking division", 2024 [4] The Banker, "The Banker's Top 1000 World Banks 2024" [5] Reuters, "UK banks slash jobs as digital shift forces cost cuts", 2024 [6] Which?, "Bank branch closures: Halifax and Santander lead the way with 99 and 95 closures respectively", 2025
- The pressure from challenger banks with advanced technology and lower physical presence has compelled traditional UK banks, like HSBC and Standard Chartered, to focus on reducing costly roles such as investment bankers while simultaneously investing in technology and AI to modernize operations and improve customer experience.
- Amidst this digital transition, major UK banks are adopting strategies to streamline and modernize their technology, with Barclays aiming to enhance its presence in priority growth areas like equity capital markets and M&A in tech and energy sectors, and Lloyds targeting improvements in digital engineering teams.
