Barclays to axe 1,000 jobs after FSA fines it £1.1m

Barclays said yesterday it would axe 1,000 jobs from its branches after its investment banking division, Barclays Capital, was hit with a £1.1m fine.

The job cuts will come because the bank plans to move away from offering financial planning advice through its branch network.

It argued that there had been a decline in the "commercial viability" of the service in recent years, and this was likely to continue as customers were increasingly buying and managing investments online. As a result, it is proposing to offer retail investment services solely to internet customers.

The bank said: "Barclays has been conducting a detailed review of its financial planning advice over recent months. This review has concluded that, given the changes to the retail investment marketplace, it is unlikely that this business would be able to deliver a return that would justify the investment required."

Union leaders were angered by the move, however. Rob MacGregor, national officer of Unite, said of the plans: "Barclays management should hang their heads in shame as 1,000 hard-working staff are told they no longer have a job at the bank."

The fine at Barclays Capital was levied by the Financial Services Authority after the division was found to have mishandled clients' money.

A series of these penalties have been levied against banks for failing to separate the funds from their reserves. It is also the second penalty faced by Barclays since the start of the year following a £7.7m levy over the way it sold two high-risk investment funds.