Barclays has told thousands of contract staff that they must accept a 10 per cent cut in pay or have their roles terminated, The Independent can reveal.
An email sent out at the beginning of the week informed them that new, lower rates would be imposed on all “contingent workers” in the UK and the US from 7 April, as part of the bank’s review of its cost base.
The move follows its hugely controversial decision to hike its top bankers’ bonuses by the same amount – 10 per cent – despite profits falling by nearly a third.
The chief executive, Antony Jenkins, justified handing over the money to so-called “top talent” at Barclays Investment Bank by warning that it would otherwise face “a death spiral” because they would walk out of the door and find roles at its competitors.
With the bank under pressure over costs from restive shareholders, contractors appear to be paying the price.
The “dear contractor” email – seen by this newspaper – said that any contractor who had not agreed to the new rate by yesterday should “please accept this communication as notice to terminate your current assignment at Barclays to finish on Friday 4th April 2014 or on your current assignment end date if sooner”.
People who had failed to respond to the email were deemed to have automatically accepted their new rates of pay. No other terms or conditions have been changed.
The bank wrote that it had imposed the new rates “as part of reviewing our cost base”. As such “we have a conducted a comprehensive contingent worker rate review and are introducing new rates for contingent workers”.
Barclays uses thousands of these workers, who can range from relatively well paid IT staff, to people in much more humble roles. Sources say that in some of the bank’s “programmes” they can make up as much as half of the staff.
But internally there has been considerable unhappiness at the way the pay cut has been handled. Many full-time staff view contractors as close and valued colleagues and feel they have been treated shabbily, particularly in the wake of the “respect” agenda pushed with great fanfare by Mr Jenkins following a string of scandals that have rocked the bank.
Mr Jenkins assumed the role of chief executive after his predecessor, Bob Diamond, was ousted after the Libor interest rate scandal that resulted in a heavy fine.
Barclays is also one of the banks caught up in the investigation into London’s foreign exchange market and could face further controversy when it reveals details of share awards to directors, expected to be within the next few days.
One Barclays banker, who wished to remain anonymous, said: “I was appalled … a contract is a contract and we should stick by it.
“What we are doing with this is basically saying we’re Barclays, we can do what we want. It’s the antithesis of the respect agenda Antony Jenkins has been talking about.
“Some of these people are quite well paid, but they’re not millionaires by any stretch of the imagination. They’re ordinary people with mortgages and 10 per cent is a very big cut.”
Contract staff with queries have been advised to contact a Glasgow-based “helpline”.
Unlike full-time staff, they lack employment protection.
Unions have sharply criticised the move, saying that contractors are paying the price for bonuses.
Frances O’Grady, general secretary of the TUC, said: “Despite falling profits and the news that up to 12,000 jobs are to go, Barclays has, incredibly, still been able to find a couple of spare billion pounds in bonuses for its senior investment bankers.
“It must seem to most people – still reeling from the prolonged impact of the crash – that top bankers are living on another planet, one far removed from the world inhabited by ordinary families.”
A spokesman for the bank said: “While Barclays remains committed to paying competitively, we have reviewed our contractor rates as part of our ongoing cost management programme.”Reuse content