Barclays is reportedly working on plans to cut up to 2,000 jobs in a £1bn cost-cutting drive, weeks after the bank’s bosses warned of the need to restructure to boost profits and dividend payments to shareholders.
The shake-up is expected to affect mainly back office jobs in departments such as compliance, human resources and legal, according to a source cited by Reuters.
Last month, the bank’s chief executive, CS Venkatakrishnan, said the bank needed to seek “efficiencies” in areas where it believed it could “increase productivity”.
Barclays’ market value has fallen more than 11% over 12 months and 15% so far this year. It employs about 87,000 people worldwide, with about 44,000 in the UK.
“We always modulate the size of our workforce everywhere in the world in which we are, and that’s what we will continue to do,” said Venkatakrishnan at the bank’s third-quarter financial update last month. “In every part of the bank, there are things we can do better.”
The main division expected to be targeted by the £1bn cost-cutting drive is known internally as Barclays Execution Services, or BX. The Reuters source said 1,500 to 2,000 jobs could go if the plans were implemented in full.
Created in 2017, BX is a central support function for the bank’s two main business divisions – UK retail banking and international operation – and was designed to eliminate duplication.
Barclays, which is expected to give full details of its job and cost-cutting plans when it announces its full-year results in February, reported £15bn in annual operating expenses in 2022. City analysts had been expecting between £500m and £1.5bn in cost cuts to be announced by the bank.
Last month, Barclays reported a slight drop in pre-tax profits, which fell 4% to £1.9bn in the third quarter amid concerns over a potential rise in customer defaults and a slowdown in corporate dealmaking that hit returns at its investment bank.
Barclays also suffered a larger than expected drop in deposits and warned that its net interest margin – the difference between what it charges for mortgages and what it pays out to savers – would probably fall in the fourth quarter, putting a further squeeze on its income. The bank recently announced that 16 more of its branches will close early next year.
Barclays declined to comment.
