Barclays is working on its cost-saving plans of 1 billion pounds ($1.25 billion) which could also involve around 2,000 job cuts, mainly in the British bank’s back office, according to a report published by the news agency Reuters.
The company’s managers are currently reviewing proposals to bolster its profitability. The person, on the condition of anonymity, stated that around 1,500 to 2,000 jobs could be cut if the plans were implemented in full.
Barclays’ managerial team is led by Chief Executive CS Venkatakrishnan who is known within the bank as Venkat.
He said that the potential cuts would primarily be at Barclays Execution Services, known internally as ‘BX’, and would form part of an overall target of reducing expenses by up to 1 billion pounds across the group over several years.
In recent years, Barclays has made efforts to reduce expenses by slashing bonuses as well as jobs in its retail and investment banking businesses. However, moves to shrink BX and the potential savings have not been reported before, Reuters reported.
Created in 2017 to consolidate support functions for the bank’s two main business divisions, UK retail banking and international, BX was designed to eliminate duplication and implement post-crisis risk management rules.
The person told Reuters that the BX headcount discussions are ongoing and Barclays could decide to prioritize layoffs in other areas. BX’s staffing and costs have grown significantly in recent years. Its headcount rose to about 22,300 as of the end of 2022, from 20,000 at end-2017, and now accounts for more than a quarter of Barclays staff, regulatory filings show. Annual staff costs at BX have risen to 2 billion pounds, from 1.8 billion pounds.
Presently, Venkat is under pressure to fund ways to boost Barclays’ tumbling book value ahead of an investor presentation in February when he will unveil a fresh strategy.
Since taking over as CEO, the veteran banker has grappled with the fallout from a trading blunder that cost the bank hundreds of millions of dollars. He also faces a prolonged battle to maintain morale across Barclays’ investment bank, where a talent exodus hinders attempts to compete with European rivals such as Deutsche Bank, BNP Paribas, and UBS.
On October 23, Venkat indicated that Barclays would embark on further restructuring in preparation for its February 20 presentation, which is seen as a key opportunity for the bank to convince shareholders that it has a plan to lift its valuation.
The company has been working with Boston Consulting Group on a strategy review, focused on which parts of the business to invest in and which should be reduced or sold.
(With Reuters inputs)
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Updated: 24 Nov 2023, 06:46 AM IST