Barclays to axe 2,000 jobs in £1bn cost cut plan
Barclays is said to be considering a cost-saving plan worth £1 billion (nearly Rs. 10,443 crore), reported Reuters. This could lead to the elimination of around 2,000 jobs, mainly in the bank's back office. The plan, led by CEO CS Venkatakrishnan, aims to increase profitability. Barclays had previously made efforts to lower costs by cutting bonuses and jobs in its retail and investment banking businesses.
Job cuts will be concentrated on Barclays Execution Services
The proposed job reductions would mainly affect Barclays Execution Services (BX), an in-house unit formed in 2017. It aimed to streamline support functions for the bank's key divisions—UK retail banking and international operations. The purpose of BX was to minimize duplication and ensure compliance with post-crisis risk management regulations.
Staffing and costs of BX have increased significantly
In recent years, BX's staffing and costs have grown significantly. The division's headcount increased to about 22,300 by the end of 2022, up from 20,000 at the end of 2017, representing over a quarter of Barclays's workforce. Regulatory filings reveal that annual staff costs at BX have risen to £2 billion (Rs. 20,887 crore), up from £1.8 billion (Rs. 18,800 crore). The ongoing discussions about BX headcount could prompt Barclays to focus on layoffs in other areas as well.
CEO under pressure to improve the declining book value
Venkatakrishnan is under pressure to find ways to improve Barclays's declining book value before an investor presentation in February, where he will present a new strategy. Since becoming CEO, Venkatakrishnan has dealt with the aftermath of a trading error that cost the bank hundreds of millions of dollars and a talent exodus in Barclays's investment bank. This had hindered competition with rivals in Europe like Deutsche Bank, BNP Paribas, and UBS.
Additional restructuring and strategy review with Boston Consulting Group
On October 23, Venkatakrishnan indicated that Barclays would undergo further restructuring ahead of its February 20 presentation. This is being viewed as a crucial opportunity for the bank to persuade shareholders of its plan to increase its valuation. Barclays has been collaborating with Boston Consulting Group on a strategy review, focusing on which areas of the business to invest in and which to reduce or sell.
