Banking: Barclays to cut 7,000 UK jobs

Antony Jenkins, chief executive of Barclays.
Photo: VisMedia Antony Jenkins, chief executive of Barclays. Photo: VisMedia

Tuesday, February 11, 2014
9:34 AM

Barclays today revealed that it is to axe between 10,000 and 12,000 jobs this year, including 7,000 in the UK.

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News of the banking giant’s plans to cut its workforce, which currently totals around 140,000, came alongside deatails of a 13% increase in its bonus pool for 2013 to £2.4billion despite a 32% fall in underlying annual profits.

Barclays, which said that around half of the planned job cuts had already been announced to staff internally, added that it also planned to cut 820 senior manager roles, including 220 managing directors and 600 directors, with its investment banking arm to account for around 400 of the senior job losses.

The group said its investment banking staff would share £1.6bn in bonuses, representing an average payout of £60,100 per employee in the division.

Chief executive Antony Jenkins said the bank is “in a better position than we have been for many years”.

But yesterday it took the unusual step of announcing its full-year profits a day early, confirming that underlying profits fell to £5.2bn in 2013, below consensus forecast in the City for around £5.4bn, after details were apparently leaked.

The bumper staff payout comes in spite of another tough year for the group, in which it added £2bn to its bill for customer mis-selling scandals in 2013 and tapped shareholders for £5.8bn in a rights issue in the autumn.

Mr Jenkins defended the increase in the staff incentives, saying the group believes in “paying for performance and paying competitively”.

The Barclays boss has already waived his entitlement to a bonus for 2013 worth up to £2.75million, citing “very significant costs” suffered last year over a series of scandals and its cash-call on shareholders.

Its increase in bonuses for the group’s 26,200 investment banking employees saw its ratio of compensation to income rise to 44% from 40% in 2012, although more than two-thirds of handouts are deferred. However, pre-tax profits in the division slumped 37% to £2.5bn over the year.

Barclays said its overall underlying profit for the final three months of 2013 was significantly lower, plunging by £1.2bn quarter-on-quarter to £191m, after being dragged lower by factors including £331m of previously announced litigation and regulation penalties.

It was also knocked by costs relating to its so-called Project Transform overhaul. Mr Jenkins launched the review of culture and practices in the wake of the bank’s £290m Libor-rigging fine, which led to the resignation of former boss Bob Diamond.

Overall bottom line profits, however, rose to £2.9bn in 2013 from £797mn in 2012.

Mr Jenkins said paying for talented staff was in the “best interests” of shareholders. He told the BBC Radio 4 Today programme: “The profits were down principally because we were taking a number of actions to reposition Barclays to become the go-to bank and we announced those actions a year ago.

“In terms of the compensation number, it is up 10% but at Barclays we have two principles around that number. The first is that we pay for performance and the second is that we pay competitively.

“We employ people from Singapore to San Francisco. We compete in global markets for talent. If we are to act in the best interests of our shareholders, we have to make sure we have the best people in the firm.”

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