Barclays To Trigger 2,000 Job Cuts To Bear $1.25 Bn Cost-Saving Plan

According to a Reuters article, Barclays plc, a British international universal bank with its headquarters in London, England, is working on measures to save as much as 1 billion pounds ($1.25 billion) on expenses, which may require laying off as many as 2,000 employees, mostly in the British bank's back office.

Proposals to increase Barclays' profitability are being reviewed by managers under the direction of Chief Executive CS Venkatakrishnan, also known as Venkat in the bank. According to the source, if they were fully implemented, 1,500-2,000 jobs may be terminated.

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, the with direct knowledge of the proposals told Reuters.

Barclays has made efforts to reduce expenses in recent years by slashing bonuses, as well as jobs in its retail and investment banking businesses, but moves to shrink BX and the potential savings have not been reported before, Reuters reported.

The 1 billion pounds that Barclays wants to save on costs equates to around 7% of the bank's 15 billion pounds in yearly operational expenses in 2022. According to the insider, Barclays may choose to prioritise layoffs in other divisions while continuing the BX headcount talks.

Both BX's expenditures and workforce have gone up dramatically in recent years. According to regulatory filings, its headcount grew from 20,000 at the end of 2017 to around 22,300 by the end of 2022, meaning that it currently employs over 25% of Barclays employees. Concurrently, BX's yearly personnel expenses have gone up from 1.8 billion pounds to 2 billion pounds.

"Venkat is under pressure to find 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," the source informed to Reuters.
He also faces a prolonged battle to maintain morale across Barclays' investment bank, where a talent exodus is hindering attempts to compete with European rivals such as Deutsche Bank, BNP Paribas and UBS, Reuters reported.

Managers across teams within BX have been working with effectively frozen budgets this year and told that costs must be reduced in 2024, a second source in the division told Reuters.

The Reuters report states that Venkat signalled on October 23 that Barclays will embark on further restructuring in preparation for its Feb. 20 presentation, which is seen as a key opportunity for the bank to convince shareholders that it has the plan to lift its valuation. Barclays is "evaluating material structural cost actions", Venkat said when it reported disappointing third-quarter results in October.

Barclays 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, according to a report published by the news agency Reuters.

(With Reuters inputs)