The Journal · AI & Work · October 28, 2026

AI and Jobs in 2026: What Barclays and Microsoft Tell Us, and What to Do Now

Two big announcements made AI sound like a job destroyer. The data tells a more useful story about which work is changing, and how small businesses, churches, nonprofits and workers can come out ahead.

A bright, empty office desk by a tall window over a hazy city, with a small glowing AI assistant orb beside an open notebook and coffee mug — Illustration created for Smith App Studio.

Short answer: Barclays plans to cut about 5,000 jobs and Microsoft has offered voluntary buyouts to about 60,000 employees, and both point to AI. The wider data says AI is reshaping which jobs exist more than it is erasing work overall. For small businesses, churches, nonprofits and workers, the smart move now is to use AI to take on the repetitive tasks and invest in the human skills that grow alongside it.

Two news clips made the rounds this month: a Channel 4 News report on Barclays and an ABC World News Tonight segment on Microsoft. Together they made AI and jobs feel like one alarming headline. The real picture is more useful than that, and more hopeful.

What did Barclays and Microsoft actually announce?

On 22 October, alongside its third-quarter results, Barclays said it would cut about 5,000 roles, roughly 5% of its workforce, with about 60% in support functions, including developers. That total includes around 1,000 jobs already cut earlier in the year. Interestingly, chief executive C.S. Venkatakrishnan has called AI “the icing on the cake, not the cake,” and the union Unite accused the bank of using AI to justify cuts.

Microsoft’s move is different in kind. It offered a voluntary buyout to about 60,000 people, about a quarter of its workforce, with until early December to decide. The goal is to contain costs while it spends heavily on AI data centres: $175 billion to $190 billion this year, depending on the estimate. An earlier voluntary retirement offer this year was taken by about 30% of eligible employees.

Is AI really taking jobs, or is that the excuse?

Both, depending on the job. The outplacement firm Challenger, Gray & Christmas tracks the reasons U.S. employers give for cuts. From January to September 2026, employers announced 573,195 cuts, down 39% on the same period last year. AI was cited for 120,136 of them, about 21%, the top reason so far this year, compared with 54,836 in all of 2025. The peak came in May at 38,579; by September, AI was cited for only 3,961.

Those are reasons employers state, not proof of cause. Critics call it “AI-washing” when ordinary cost cutting gets an AI label. Overall cuts are down. What is changing is which jobs and skills are in demand.

Who is most affected, and who is growing?

Stanford’s Digital Economy Lab found that workers aged 22 to 25 in the most AI-exposed jobs saw a 13–16% relative drop in employment, depending on the version of the study, while experienced workers in the same jobs held steady. The losses showed up where AI automates the work, not where it assists people doing it.

The World Economic Forum’s Future of Jobs Report 2025 expects 170 million jobs created and 92 million displaced by 2030, a net gain of 78 million. It also expects 39% of workers’ core skills to change, and 63% of employers name skills gaps as their biggest barrier. Fast-growing roles include AI and data specialists and cybersecurity, but also care, education and delivery work.

What should small businesses, churches and nonprofits do now?

Use AI to augment the people you have, not replace them. A missed call, an unanswered message or a stack of paperwork is often what holds a small team back. Tools like an AI phone receptionist, website chat or an assistant trained on your own documents take on that load, so staff and volunteers can spend more time with customers, members and the people they serve. Our guide to AI receptionists for small businesses walks through how that works.

Then train your people. Give everyone a few hours a month to learn the tools. Teach the judgement, care and relationship skills that AI cannot fake.

What can workers do to stay ahead?

Learn to work with AI in your current field before you are asked to. Document what you do that a machine cannot. Build a visible track record, which our piece on leveling up your career brand covers. If a buyout or severance offer arrives, read it slowly, and verify any message about it before you click.

If your organisation wants help putting AI to work without losing the human touch, start a conversation with us.

Frequently asked questions

How many jobs is Barclays cutting because of AI?

About 5,000, roughly 5% of its workforce, including around 1,000 already cut earlier in 2026. Most fall in support functions. The chief executive describes AI as one contributor rather than the main cause.

Is Microsoft laying off 60,000 people?

No. Microsoft offered a voluntary buyout to about 60,000 employees, roughly a quarter of its workforce, to contain costs while it spends heavily on AI. Employees choose whether to accept.

Is AI causing more layoffs overall?

Not overall. Challenger, Gray & Christmas counts fewer U.S. announced cuts in 2026 than in 2025, though AI was the most cited reason. The bigger shift is in which jobs and skills are in demand, especially entry-level and support roles.

How can a small business or church use AI without cutting staff?

Give AI the repetitive work, such as answering common calls, sorting messages and drafting documents, and train people to use it well. That frees staff and volunteers for the personal work that matters most.