Barclays axes 13,600 jobs in nine months

3 min read
Steve Slater

Barclays has cut 13,600 net jobs in the nine months since Jes Staley arrived as chief executive, or 10% of its staff, underscoring the bank’s stringent focus on costs.

The cuts have mainly come from attrition and a freeze on hiring imposed by Barclays in September that is still in place, and cuts in its investment bank and continental European operations.

“As part of our focus on cost, we have now taken headcount down by some 13,600 people in just nine months, the net reduction,” Staley said at a Barclays banking conference for investors in New York on Monday.

Barclays confirmed the number and said it included contractors, temporary and agency workers.

The bank employed about 138,000 staff at the end of 2015, down 900 from the end of 2014.

Staley said at a conference in March that more than 6,000 positions had gone in his first 100 days in charge, marking a sharp acceleration in job reductions in the past four years, and his latest estimate shows the pace of cuts has continued.

Staley, who started in December, cut 1,200 jobs in the investment bank in January as he pulled back from Russia, Brazil and seven countries in Asia.

Banks are under increasing pressure to cut costs to try to improve profitability. Most banks are making returns below the cost of capital and revenues are under pressure from weak trading income and the impact of low interest rates, leaving costs the main lever executives can pull.

Barclays aims to get its costs to below 60% of income in the long term. Its cost/income ratio was 70% in the fist half of this year.

Staley said he was happy with Barclays’ turnaround progress, and said he would not be changing his strategy or the pace of delivery following Britain’s vote to leave the European Union, although he said the bank could beef up its operations in Ireland or elsewhere as a result.

Staley said the bank had “multiple avenues” to change its structure due to any Brexit impact.

“These include expanding the scope of our operations of our Irish subsidiary, local licensee of branch operations in the EU, and the use of third-party access frameworks, like the incoming MiFID II rules,” Staley said.

But he said compared to the complexity of setting up its intermediate holding company in the US this year or separating its UK retail banking operations by 2019, any changes “would be significantly less costly, as they are on a much smaller and simpler scale”.

Barclays will also show “significant further progress” on running down its non-core assets in the second-half of this year, Staley said. He said the non-core unit will be closed by the end of 2017, when its risk-weighted assets will be reduced to less than £20bn, from £47bn at the end of June.

The bank was making progress on the sale of its French retail business and also continues to steadily reduce its non-core derivatives holdings, to add to other recently completed sales, Staley said.

Barclays bank