Barclays expected to cut 15,000 jobs this year in huge City cull
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
deputy business editor
Thursday 08 May 2014
Barclays will announce today that it intends to cut thousands more jobs than it indicated it would as recently as February as chief executive Antony Jenkins wrestles with its falling profits.
The cull is expected to total up to 15,000 this year – more than the 12,000 previously flagged and signifying one of the biggest culls to hit the City since the financial crisis.
Of the extra cuts of up to 3,000, a majority will be in the investment bank with a large number falling among the 10,000-strong workforce in Canary Wharf. About 800 investment bankers are thought to have left already this year.
A further 6,000 roles will be cut from the division over the following two years, reducing the total investment banking workforce by a quarter by the end of the process.
Analysts said Mr Jenkins, who faced the anger of shareholders recently for increasing bonuses for investment bankers while profits fell, had to impress on investors today that he was serious about boosting the bank's profitability.
Only this week, he reported that investment banking profits were hit by poor results from trading in bonds.
One analyst said last night: "The markets would be absolutely shocked if the strategic review is not as dramatic as recent leaks have suggested. And that means large scale cost-cutting."
Mr Jenkins is expected to flag his intention to cut the global workforce from 140,000 to 100,000 in six years, reports suggested last night. Retail banking jobs will go and several hundred of its 1,600 branches face closure.
Mr Jenkins also believes the move to internet and phone banking means the current branch network is bigger than it has to be. While he will be questioned on possible branch closures today, it was not clear last night whether he would be providing details.
Much of today's strategic review has been leaked in recent weeks, including the plan to create a "bad bank" like RBS did for duff or higher-risk loans it made. Details will be forthcoming today but bad bank assets are widely expected to include its loss-making consumer banking loans business in continental Europe.
Fixed income assets are also expected to go into the pot, which analysts have predicted will comprise of about £100m of loans and assets. The idea is to get the bad bank loans into a condition in which they can be either unwound or sold.
Barclays has been struggling in investment banking like the whole sector due to extremely weak revenues from bonds, currencies and commodities. This has led to major restructuring efforts across many banks.
Against this backdrop, Barclays has recently lost a string of senior executives, most notably former head of Barclays Americas, Skip McGee.
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