A plan to save $1.25 billion includes eliminating 2,000 jobs

2023-11-24 12:24:26

Barclays: A plan to save $1.25 billion that includes eliminating 2,000 jobs

Barclays Bank is preparing a plan to save one billion pounds ($1.25 billion), which may include eliminating regarding 2,000 jobs, most of them in the British bank’s management offices, Archyde.com reported on Friday, citing a person with direct knowledge of the matter. ($1 = 0.8025 pounds).

Managers at Barclays, led by CEO CS Venkatakrishnan, known inside the bank as Venkat, are reviewing proposals aimed at boosting profitability. As part of this, between 1,500 and 2,000 jobs might be cut if the plans are fully implemented, the source said.

While a Barclays spokesman declined to comment on Thursday, the source added that the potential cuts would be primarily in Barclays’ execution services, known internally as “BX,” and would form part of an overall goal to cut expenses by up to £1 billion across the group over the course of the year. Several years.

Analysts reported that the size of the potential savings might reassure investors, in light of market expectations that ranged between 500 million and 1.5 billion pounds in bank restructuring costs without much understanding of how this might be translated into savings.

In this regard, RBC analyst Benjamin Thoms said: “Before today, the market roughly knew the cost that this trend might incur, but the benefits were not clear, and they have now become clearer,” adding: “This will be viewed in a different light.” “It’s a net positive for investors, but we now need to see more detail regarding how long the benefits will take to materialize.”

Barclays has made efforts to reduce expenses in recent years by cutting bonuses, as well as jobs in its retail and investment banking businesses, but moves to reduce BX execution services and potential savings have not been reported previously.

The Implementation Services were launched in 2017 to unify the support functions of the bank’s two main business divisions, UK and international retail banking, and were designed to eliminate duplication and implement risk management rules post-crisis.

Barclays’ cost-saving target of £1 billion represents regarding 7% of the bank’s core annual operating expenses of £15 billion in 2022.

The source pointed out that discussions on the number of employees in implementation services are continuing and Barclays may decide to prioritize layoffs in other areas.

The number of staff and costs in implementation services has increased significantly in recent years. Regulatory filings show that the number of its employees rose to regarding 22,300 according to data at the end of 2022, up from 20,000 at the end of 2017, and they now represent more than a quarter of Barclays’ employees.

At the same time, annual staff costs in implementation services rose from £1.8 billion to £2 billion.

Venkat is under pressure to find ways to boost Barclays’ flagging book value ahead of a presentation to investors in February when he will unveil a new strategy.

Since taking over as CEO, the veteran banker has faced the repercussions of a business blunder that cost the bank hundreds of millions of dollars.

He also faces a long battle to maintain morale at Barclays’ investment bank, where an exodus of talent hampers attempts to compete with European rivals such as Deutsche Bank, BNP Paribas and UBS.

Barclays shares rose 0.3% on Friday morning, but have fallen 26% since Venkat took over on November 1, 2021, while Deutsche shares changed little, and HSBC shares rose 37%. .

(Archyde.com, Al-Arabi Al-Jadeed)

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