AI Is the Icing, Not the Cake: Barclays Cuts, Cafe Queues and Volkswagen's Pay Freeze Plan

More than 100 people queued outside a Manchester cafe this week for one part-time barista job, after more than 400 had already applied by email, the BBC reported. The same week, Barclays said it will cut about 5,000 jobs and its chief executive called AI "the icing on the cake not the cake". Volkswagen's works council said it has information that management plans to freeze pay for more than 660,000 staff until 2030, which Volkswagen declined to comment on, and ASML's chief executive said he will tie senior pay to how employees rate the company.

Every one of those employers had a reason. Barclays pointed to AI and infrastructure, Comcast told investors not to "look at it as a cost-cutting exercise", Qualcomm called its cuts "performance-focused", and Deloitte Australia cited client demand. What this suggests is that the stated reason matters less to the person on the receiving end than the result: a thinner first rung, a flatter pay line, or a role that was there on Monday.

FROM THE EBN NETWORK

Find the right people. Search hundreds of screened employer branding agencies, consultants, platforms and specialist providers. The employer branding rabbit hole now has filters.

Explore the Directory

The short answer: employers are explaining this week's cuts through AI, redesign and performance, while the evidence below, from Goldman Sachs economists to Barclays' own chief executive, suggests AI is one factor among several. The effects land in three places this issue follows: the first job, the manager's desk and the pay packet.

This Week’s Paper Cut

Prefer to watch or listen? The video and podcast follow this article’s structure, and the article is the full, sourced version.

We keep tracking to a minimum. The video is hosted on YouTube and the podcast is hosted on PodBean, which may place cookies that measure viewing and personalize content. We only load the player after you consent to these cookies. You can update your cookie settings any time.

Who is blaming AI for job cuts, and who is not

Barclays said on 22 October that it will cut about 5,000 jobs, about 5% of its 93,000 staff, with 1,000 already gone this year and 4,000 more by the end of it, according to the BBC. The Guardian reports that about 60% of the cuts are in support functions, "including fewer developers, as AI makes our people more productive", in the words of finance chief Anna Cross. The Associated Press adds that the bank's quarterly report cited "organisational simplification and technology change efficiency driven by AI", and the results announcement itself refers to "expected technology-enabled FTE reductions". Profit before tax grew 12% to £2.3bn.

Chief executive CS Venkatakrishnan was more careful. "AI is the icing on the cake not the cake", he said, because "you need to do the infrastructure build to get the benefits of AI", and he described technology investment as "driving the bulk of the efficiency gains". Unite general secretary Sharon Graham said the bank is "using AI as an excuse to discard its loyal and long-suffering workforce", while AJ Bell's Russ Mould said it was "reaching for the AI lever". The BBC notes that HSBC, Standard Chartered and Danske Bank have also flagged AI-related cuts this year.

The economists are less dramatic. Goldman Sachs economist Joseph Briggs estimated in a note reported by Fortune that up to 9% of workers could be displaced during the AI transition, with slower hiring weighing on another 3%, roughly one worker in 11. But disruption, the note says, is "limited when the overall economy is healthy but accelerates during cyclical slowdowns", and only 23% of US establishments have AI in regular workflows.

Others chose different words. Comcast is taking a $1bn fourth-quarter charge that includes layoffs in its connectivity business, with finance chief Jason Armstrong saying "don't look at it as a cost-cutting exercise", Deadline reports. The same call said agentic AI tools have eliminated more than 30 million customer service interactions this year. Qualcomm's chief executive, Cristiano Amon, told staff the company will make a "performance-focused reduction", according to Reuters.

The pattern here is that AI is named most readily where it can be counted, as at Comcast and Barclays, and left out where the story is structure or performance. EBN has been testing the AI explanation against the numbers for weeks, in Executives Won't Blame AI for the Layoffs. Their Own Employees Say Otherwise and AI Isn't Behind Most of This Year's Layoffs. Goldman Sachs Has the Number.

Employer Brand POV

Write the real reason for a change in plain words before it is announced, and say what AI did and did not contribute, because this week's coverage shows analysts, unions and employees will test the claim against the accounts.

The first job: a cafe queue, a UK youth plan and a thinner junior bench at Anthropic

The Manchester queue came with two explanations. Cafe manager Luke Taylor told the BBC that "there is a lot of AI that people use", while barista Em Lindsay, 21, said employers "don't want to train people up".

In Westminster, Prime Minister Andy Burnham wrote in the Times that nearly one million 16 to 24-year-olds are not in education, employment or training, an "economic catastrophe and moral failure", the BBC reports. His plan includes 22,400 apprenticeships a year in accountancy, legal and consultancy, plus 40,000 construction placements, ahead of the Budget on 28 October. Work and Pensions Secretary Pat McFadden said 60% of them have never had a job.

Singapore is taking a different route: about 3,000 year-long internships over three years, with employers receiving up to $1,000 a month per intern, the Straits Times reports. Senior Minister of State Tan Kiat How said AI "is increasingly making entry-level roles redundant".

At Anthropic, the junior share of technical staff has fallen from 21% to 14% since early 2025, and junior technical hires from 27% to 9%, according to TechCrunch's coverage of the company's workforce report. For applicants the experience is often silence: Greenhouse surveyed about 2,800 job seekers across five countries, and HR Dive reports that 81% had been rejected in the past year without being contacted, while 60% had changed or considered changing how they wrote applications so they would not look AI-made. It is vendor research, so treat it as a signal, but Greenhouse's chief people officer, Sharawn Tipton, put it plainly: "neither side thinks hiring is working".

What this suggests is that the entry point is narrowing from both sides, with employers hiring fewer juniors and applicants sending more AI-assisted applications into a funnel nobody is answering. EBN has followed this fault line in Too Young to Hire, Too Experienced to Hire and, on the silence candidates meet, in The second Talking Point: the gloss, the varnish, and the rejection email nobody reads.

Employer Brand POV

Reply to every applicant who reaches a human screen, even with a short automated note naming the stage they reached, because Greenhouse's data, though from a vendor, suggests silence is now the experience most candidates expect.

FROM THE EBN NETWORK

Your employees know the truth. Does your EVP? At Fathom we measure the "Credibility Gap" between your promise and their reality.

Close the Gap

AI at the manager's desk: harder to judge the work, and a new test in the Google interview

A Nielsen survey of 1,700 directors and senior managers in seven countries, commissioned by Monday.com and reported by TechCrunch, found that more than half find it harder to evaluate employees' work since adopting AI. Some 39% of leaders use AI to help draft performance reviews, and 58% expect to oversee more AI agents than human employees within a year. Anthropic's own report suggests what that supervision costs in time: meeting time per employee is up 20%, and 20% of staff said their job had shifted "from actually doing work to managing Claudes".

Uber laid off about 10% of its corporate staff, around 3,300 people, in September without citing AI, and this week gave about 30,000 office employees access to ChatGPT Work, Business Insider reports. EBN looked at what happens when AI starts doing parts of the job in The Better You Get at AI, the Closer You Get to Replacing Yourself. Hiring is changing in step: internal documents seen by Business Insider show Google allowing AI in coding interviews, piloting a "code comprehension" interview that assesses AI fluency, and testing Gemini to draft interview feedback.

The pattern here is that AI can draft the wording of an EVP but cannot report what the talent you want to hire actually thinks, which is the argument of EBN's 22 October piece, AI-Generated EVPs: Why Skipping the Research Is a Really Bad Idea. Pew Research Center found that when leading AI models stood in for real survey respondents, they missed the human results by about 11 to 13 percentage points on average.

Employer Brand POV

Tell candidates in writing where AI is part of your hiring process and what a person still decides, because 88% of the job seekers in Greenhouse's survey want disclosure to be a legal requirement, and Google's documents show how quickly interviews are changing.

Pay and accountability: Volkswagen plans a freeze to 2030, and ASML ties executive pay to staff satisfaction

Volkswagen's global works council said this week that it has information that management plans to freeze pay at 2026 levels until 2030 for more than 660,000 employees worldwide, about 275,000 of them in Germany. Confirming an earlier Süddeutsche Zeitung report, the council called the approach "absurd". IG Metall said pay at Volkswagen "is decided at the negotiating table, not by decree from the executive boardroom". Volkswagen declined to comment on what it called "speculation", and said talks later that week would be the forum for any labour cost proposals.

At ASML, chief executive Christophe Fouquet told staff in a memo seen by Business Insider that employee satisfaction will feed into executive pay. The company's engagement index fell from 78% to 73.5% after a reorganisation that began with a January announcement that up to 1,700 jobs could go, and six survey questions, including whether people can share opinions without fear of retaliation, now form a Workplace Experience Index in the incentive plan for senior leaders.

Closer to the shop floor, Construction Enquirer reports that Taylor Wimpey has asked about 50 North East joiners and scaffolders, found to be earning nearly 25% more than comparable roles, to sign new contracts on reduced terms. Unite regional officer Greg Robson said the union is looking at "all avenues", including industrial action, while Taylor Wimpey says it consulted ACAS. In Singapore, the National Wages Council recommended rises of 6% to 8% for workers earning up to S$2,800 a month, the highest range since guidelines began in 2021, though the Business Times notes that more than 60% of employers fell short of last year's guidelines.

Torani's chief executive, Melanie Dulbecco, is the counterexample. She told Business Insider that "layoffs are a choice", and Fortune reports the syrup maker has never cut workers en masse in its 101 years.

The pattern here is that pay is absorbing cost pressure at Volkswagen and Taylor Wimpey, while ASML is starting to treat the employee view of leadership as something executives are paid on. What this suggests is that how a change is decided and communicated is now part of the employer proposition, and employees will test it. EBN has covered the same ground in The Org Chart Got Redrawn This Week: Fewer Managers, Shorter Ladders, Frozen Hiring and No Owner for the AI and This Week, Every Decision Got Made Without the People It Affects.

Employer Brand POV

Link at least one senior leader's incentive to something employees report about the workplace, as ASML has now done, and publish what changes as a result, because ASML's own survey shows how quickly a restructuring can pull engagement down.

FROM THE EBN NETWORK

Employer branding works better when people share what they know. EBClub brings practitioners together to exchange ideas, compare experiences, and learn from the people doing the work.

Explore EBClub

Odds and Ends

The Care Quality Commission rated leadership at Epsom and St Helier University Hospitals NHS Trust as "requires improvement" after a May inspection, the BBC reports. Staff described "bullying and harassment" and a "fear of reprisal when speaking up", while the trust said inspectors "found many strengths" and that it is engaged in culture change.

The Standard, a US insurer, surveyed 509 HR decision-makers and 501 employees, and People Matters reports that HR estimated 6% of men take family caregiving leave while 71% of men employees said they do. The sample is small and self-reported, but what this suggests is that benefits communications built on HR's assumptions may miss the men who use them.

The Cut List

Eight employers confirmed or detailed cuts this week. The stated reasons ranged from AI-linked efficiency at Barclays to redesign at Comcast, performance at Qualcomm and client demand at Deloitte Australia, while GovTech Singapore's chairman has said its programme is not AI-driven.

Put the week side by side and the shape is plain. The reasons were AI at Barclays, redesign at Comcast, performance at Qualcomm and cost at Volkswagen, while the effects were a queue for a cafe job, managers who cannot tell whose work is on the desk, and a pay line that stops moving. What this suggests is that employers who say plainly which reason is the real one, and who ask employees about the result, will have the easier conversation with candidates and with the people who stay.

Takeaways

• Barclays is cutting about 5,000 jobs, about 5% of its 93,000 staff, and its chief executive says AI is "the icing on the cake not the cake", with technology investment driving the bulk of the efficiency gains, according to the BBC and the Guardian.
• Goldman Sachs economists estimate that AI could displace up to 9% of workers, plus 3% through slower hiring, but say the disruption is limited when the economy is healthy and accelerates in downturns, as reported by Fortune.
• Anthropic's junior share of technical staff fell from 21% to 14% since early 2025, and its junior technical hires from 27% to 9%, according to TechCrunch.
• UK Prime Minister Andy Burnham says nearly one million 16 to 24-year-olds are not in education, employment or training, and Singapore is funding 3,000 year-long internships to counter AI pressure on entry-level jobs.
• A Greenhouse survey of about 2,800 job seekers found that 81% were rejected in the past year without being contacted, according to HR Dive, though it is vendor research.
• A Nielsen survey for Monday.com found that more than half of 1,700 senior managers find it harder to evaluate work since adopting AI, and that 39% of leaders use AI to help draft performance reviews.
• Volkswagen's works council says management plans to freeze pay for more than 660,000 employees until 2030, a plan Volkswagen has not confirmed.
• ASML will include a Workplace Experience Index, built from six employee survey questions, in the incentive plan for senior leaders after its engagement index fell from 78% to 73.5%.

Inside EBClub

EBClub, EBN's community for in-house employer brand, talent attraction, TA and HR practitioners, follows Bristol on 22 October with a run of events that takes it to Madrid, Paris, Rotterdam and back to London. Here is the calendar, and who to thank.

Not a member yet? EBClub is free for in-house practitioners: Join here.

Ready to book? Tickets for every date are in the events section, and thanks to everyone giving their time to share insights and experience with the employer branding community.

SOURCES