COMPANY OF THE WEEK: BARCLAYS

Barclays said it would eliminate 6,000 jobs, or 7.5 per cent of its staff, to cut costs and increase profitability. "It's decent housekeeping they should have been doing a while ago," said Tom Morris-Jones at broker Albert E Sharp.

The shares rose 4 per cent on the bank's first strategic decision since Michael O'Neill resigned in April. He was the third chief executive in six months, and his departure due to ill health spurred speculation the bank was vulnerable to takeover.

Barclays, which is still looking for a new chief, will take a charge of pounds 400m this year to cover the cost of the job cuts in its retail and corporate banking operations - mainly administrative staff. The bank said the cuts, a mixture of attrition and dismissals, would save it pounds 200m a year.

Since the start of April, the stock has fallen on concern the bank lacks a leader who can staunch losses in investment banking and emerging markets. Barclays sold its equities business at a loss in 1997.

Job cuts should help Barclays lower its ratio of costs to income from about 55 per cent, bringing it in line with Britain's most efficient banks such as Bank of Scotland, said Michael Trippitt, analyst at Schroders Securities.

Barclays is already more efficient than some rivals. Even so Mr Trippitt said "they're running up a down escalator to achieve the cost benefits" since the charges would not be outweighed by savings until 2001. Barclays will take about a third of the charge this year.

Sir Peter Middleton, Barclays' chairman, said the job cuts were the result of an 18-month review of the bank's businesses. He would not rule out further cuts and said the reductions would be evenly spread throughout all the operations.

"The announcement is very sad, but on a business level this is absolutely essential," he said. "This is to produce a simpler structure for people to bank with us and reduce costs."

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral