Starling Bank is cutting around 130 jobs, roughly 3% of its 4,000-strong workforce, as the London-based neobank restructures its banking and technology operations. Staff were told this week that the changes were intended to simplify how the company operates, reduce duplication, and accelerate product delivery.

The cuts come as Starling pushes AI deeper into its operations. In March, it launched Starling Assistant, an agentic AI tool that can set up savings goals, organise bill payments, and quiz customers on their spending patterns using voice or text prompts.

Falling profits in a falling-rate world

The restructuring follows a second consecutive year of declining earnings. Pre-tax profit fell to £217 million in the year to March, down from £223 million a year earlier, while total revenue dropped from £940 million to £887 million.

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Starling attributed the decline to falling interest rates, which have squeezed margins across UK banking. The neobank remains profitable, having now posted five consecutive years in the black, but the direction of travel is clear.

Customer numbers continued to grow, with platform accounts reaching 6.2 million, up from 5.3 million the previous year. Deposits rose to £12.7 billion.

The AI arms race among neobanks

Starling’s AI push is part of a broader race among digital banks to automate customer-facing operations. Revolut launched its own AI assistant, AIR, to UK customers in April, offering similar capabilities around spending analysis and account management.

Starling’s scam detection tool, launched in October 2025, uses Google’s Gemini models to analyse marketplace listings and flag fraud in real time. The tool has since been expanded to detect more than ten types of scam, including romance fraud and deepfake phishing.

“A key factor in our competitive edge over legacy banks is our agility, our ability to test, launch, learn and reorganise at pace,” a Starling spokesperson said. The bank added that it is continuing to hire technology and AI engineers even as it cuts elsewhere.

Engine as the growth story

The brighter part of Starling’s business is Engine, the software-as-a-service arm that licenses the bank’s core technology stack to other financial institutions. Engine’s revenue grew 25% last year as its client base doubled on international demand.

Engine already powers banks in the UK, Romania, Australia, and New Zealand, and is now targeting the US market. The division has opened an office in New York with a reported $50 million investment and is in discussions with mid-tier American lenders.

A sector-wide shift

Morgan Stanley estimated in June that AI could eliminate as many as 400,000 European banking jobs by 2030, double its earlier forecast of 200,000. ABN Amro announced last year that it would cut roughly 20% of its workforce by 2028, primarily through automation.

Starling’s 130 cuts are modest by comparison, but they signal a shift within the neobank sector itself. The digital challengers that once defined themselves against the bloated workforces of high-street banks are now applying the same efficiency logic to their own operations.