Thursday, August 21st21.9°C
22951
22285

Barclays to slash around 14,000 jobs this year as it reduces size of investment banking arm

LONDON - Barclays PLC, the scandal-hit British bank, is to cut 14,000 jobs this year in an attempt to streamline operations and reduce the importance of the investment banking division.

It said Thursday that further reductions will be made at the investment banking arm over the next two years, taking the total number of reductions at the bank to 19,000 by 2016.

The 325-year old bank, which is Britain's second largest by assets, is undergoing a culture change after a string of scandals, including its involvement in the rigging of the Libor interbank lending rate.

Chief Executive Officer Antony Jenkins has made restoring trust a centerpiece of his mission in reforming the bank — and the investment banking division has been one his primary targets because of the risky behaviour it undertook before the 2008 financial crisis. Jenkins underscored his wish to slim down operations and pledged to make Barclays "more balanced."

"Barclays will be much less exposed to volatility in our investment bank; we will have a structurally lower cost base; and we will continue to invest for growth," he said in a statement. "We will be leaner, simpler and stronger."

The move further unravels the legacy of Bob Diamond, who expanded the investment banking arm before becoming CEO. His unapologetic attitude and colossal pay package made him the focus of much of the fury toward bankers in Britain once the scandals hit, and he was forced to resign.

Investment banking took the brunt of the job cuts, with 7,000 by 2016. Barclays said the division would account for no more than 30 per cent of operations in the future — as opposed to half today.

Barclays is also creating a "bad bank" unit, which will house 90 billion pounds ($152 billion) of investment bank assets and 16 billion pounds of European retail banking assets. The hope is that the assets can be wound down or sold off eventually and to increase confidence in the overall health of Barclays.

The bank is also streamlining geographically, closing customer branches in Portugal, Spain, Italy and France, though it highlighted prospects in Africa, described as "an exciting, growing part of the world."

Investec analyst Ian Gordon said Thursday's decisions should help improve the bank's underlying performance.

"Barclays is already a low-risk, profitable bank, but today's 'reset' is about rightsizing the bank to reflect a smaller addressable (investment bank) revenue pool and to deliver improved/sustainable returns," he said.

But the stark job numbers will give British leaders pause. Barclays has faced criticism in the past for ramping up its bonus pool, even as it prepared to cut jobs.

Dominic Hook of the Unite trade union, said that times had been turbulent for the bank's workers, "who have worked hard to keep the bank on track against a backdrop of continued uncertainty and redundancies."

"The bank needs to recognize their tireless work," he said.

The Canadian Press


Read more Business News

21297


Recent Trending




Today's Market
S&P TSX15564.33+2.38
S&P CDNX995.42-1.28
DJIA17040.2061.07
Nasdaq4532.104+5.623
S&P 5001992.35+5.84
CDN Dollar0.9137+0.0022
Gold1273.80-19.60
Oil96.30+1.82
Lumber356.10+1.10
Natural Gas3.879+0.056

 
Okanagan Companies
Pacific Safety0.18-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.20-0.01
Cantex0.065-0.005
Anavex Life Sciences0.260.00
Metalex Ventures0.075-0.01
Russel Metals37.55+0.10
Copper Mountain Mining2.90-0.02
Colorado Resources0.175-0.01
ReliaBrand Inc0.095+0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.215-0.015

 



22439

FEATURED Property
1973251389 Adamson Drive
4 bedrooms 3 baths
$625,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Joint accounts: what you need to know!

Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...


Cost of an Injury Lawyer

Let’s face it; nobody wants to pay for legal services if they do not have to, but if you have been injured in an accident you may have thought about hiring a lawyer to help you navigate your cla...


Going home to a bully!

Finally, after three months in New Brunswick, I am back home in the sunny Okanagan. It is a delight to be home and the lake, vistas, people and climate never disappoint. Like many people however, I...

_








Member of BC Press Council


22267