Barclays to cut 19,000 jobs over three years
- 8 May 2014
- From the section Business
Barclays is to cut 19,000 jobs by 2016, with more than 9,000 to go in the UK, the bank has said.
As part of a new strategy, the investment part of the bank will lose about 7,000 jobs by the end of 2016.
Barclays' investment bank has been hit by a slowdown in the demand for government and company debt.
Barclays will also set up a "bad bank" which will eventually sell or run down £115bn of non-core operations.
These include £90bn of investment bank assets and all of its European retail banking operations, amounting to £16bn of assets.
Retail banking in Spain, Portugal, Italy and France will be shifted to non-core operations.
"Bad banks" have been used by a number of institutions since the global financial crisis as a way of ring-fencing risky loans and assets.
The carve-up will give greater prominence to Barclays' retail operations in the UK, its Barclaycard credit card arm and its African business.
"This is a bold simplification of Barclays," said chief executive Antony Jenkins.
"We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage."
Barclays job losses
Jobs to be cut by 2016
Around 9,000 in the UK
38,800 retail banking
26,000 investment banking
Current staff numbers
BBC Business Editor Kamal Ahmed said on Wednesday that Barclays could close up to 400 branches over the next few years, but that an announcement about branch closures was not imminent.
In its statement on Thursday, Barclays made no mention of any retail bank branch closures.
The retail banking arm employs 32,900 people in the UK, and around 5,900 in Europe.
The majority of the job losses will happen this year, with 14,000 jobs to be cut across the group in 2014.
The number is higher than the 10,000 to 12,000 global jobs that the bank previously said it wanted to cut this year.
The investment bank, which employs around 26,000 people, will lose 2,000 posts this year and a further 5,000 by the end of 2016.
In the first quarter of this year Barclay's profits fell 5%, after its investment banking business was hit by a 28% slump in revenue.
Revenue from trading in currencies, bonds and commodities dropped 41% to £1.23bn.
Chancellor George Osborne told the BBC that job losses at Barclays were regrettable, but Barclays wanted to be "focused on its customers".
"Part of our long-term economic plan is having British banks that aren't bailed out by the taxpayer, but instead support the British economy, lend to small businesses, and lend to families," he said.
"Now Barclays are seeking to build a bank that is focused on its customers, and of course, that means some changes."
In afternoon trading on Thursday, Barclays shares were up by more than 7%.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said:
"The news has been well received, although this is unquestionably a long term game," he said.
"The separation of non-core assets, a continued reduction of costs and a streamlining and focus on more profitable operations all seem to make strategic sense."
However, the change of direction for Barclays needs to be implemented both quickly and carefully "since investors' patience on the banking sector as a whole is showing signs of wearing thin after some years of rapid change," he added.
Investment banks have shed staff as investors have moved away from government and company debt in the form of bonds. Commodity and currency trading has also taken a hit.
Several investment banks saw income drop in the first quarter after a grim start to the year for bond and interest rate trading.
For example, revenue at HSBC's investment bank fell 4% amid "challenging" market conditions, the bank said.
Do you work for Barclays? Are you affected by the job cuts? You can send an email to firstname.lastname@example.org adding 'Barclays' in the subject line.