Barclays is reportedly in the early stages of developing plans to eliminate up to 2,000 jobs as part of a £1bn cost-cutting initiative, marking a strategic move to enhance profits and dividend payments to shareholders.
The potential shake-up is expected to primarily impact back-office roles in departments such as compliance, human resources, and legal, according to an inside source cited by Reuters.
Last month, Barclays’ Chief Executive, CS Venkatakrishnan, highlighted the imperative need for restructuring to achieve “efficiencies” and increase productivity.
This revelation comes as Barclays has witnessed a market value decline of over 11 percent in the past 12 months and 15 percent year-to-date. The banking giant currently employs approximately 87,000 people globally, with around 44,000 in the UK.
Venkatakrishnan stated during the third-quarter financial update, “We always modulate the size of our workforce everywhere in the world in which we are, and that’s what we will continue to do. In every part of the bank, there are things we can do better.”
Barclays Execution Services
The primary focus of the £1bn cost-cutting drive is expected to be the internal division known as Barclays Execution Services (BX), created in 2017. BX functions as a central support unit for the bank’s two main business divisions—UK retail banking and international operations—with the primary goal of eliminating duplication. The Reuters source indicated that the implementation of the full plans could result in the loss of 1,500 to 2,000 jobs.
Barclays is anticipated to provide comprehensive details of its job and cost-cutting strategies when it discloses its full-year results in February. In 2022, the bank reported £15bn in annual operating expenses, prompting City analysts to speculate on cost cuts ranging from £500m to £1.5bn.
In the third quarter, Barclays reported a modest 4 percent drop in pre-tax profits to £1.9bn. Concerns over a potential rise in customer defaults and a slowdown in corporate dealmaking impacted returns at its investment bank. The bank also experienced a larger-than-expected drop in deposits and warned of a probable decline in net interest margin in the fourth quarter, further squeezing its income. Recently, Barclays announced the closure of 16 more branches early next year.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
