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Barclays to cut 12,000 jobs as bonus pool jumps 10% despite slump in profits

Barclays increased its total bonus pool by 10% to £2.4bn from £2.1bn in 2012
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Barclays has announced plans to axe up to 12,000 jobs, including 7,000 positions in the UK, by 2015 in a bid to slash costs despite hiking compensation for investment bankers.

The lender said the cuts include 820 senior manager roles, including 220 managing directors and 600 directors, as part of what Barclays described as a "streamlining" programme.

The bank said half of the UK staff affected by the cuts has been notified and it hopes to make the majority of redundancies voluntarily.

The fresh cuts come as the bank announced its bonus pool for top staff increased 10 per cent to £2.4bn last year, from £2.1bn in 2012, despite posting a 32 per cent decline in full-year profits.

The bank's bonus pool for its investment banking division jumped 13 per cent to £1.6 billion, or £60,100 a head, despite making a fourth quarter loss of £329 million against a profit of £760 million a year ago.

Barclays' compensation-to-income ratio climbed to 43.2 per cent last year from 40 per cent in 2012. The bank previously said it is aiming for a compensation ratio in the mid-30s.

Chief executive Antony Jenkins, who turned down his £2.7 million bonus, defended the move arguing the bank believes "in paying for performance and paying competitively".

TUC General Secretary Frances O’Grady said the bank had "stuck two fingers up to hard-pressed families across Britain" by announcing another multi-billion pound bonus pool.

The announcement comes a day after Barclays was forced to release headline profit figures nearly 24 hours ahead of schedule in a further embarrassment for the bank following the theft of thousands of customers’ confidential data.

Barclays reported adjusted profits before tax fell from £7 billion to £5.2 billion in 2013, while statutory profits had jumped from £246 million to £2.9 billion.