Thousands of UK jobs to be axed this year as quarterly profits shrink 5 per cent
Barclays chief executive, Anthony Jenkins, has announced plans to cut 14,000 jobs in 2014 – half of them in the UK – as part of a group strategy review to create a “leaner, stronger” bank.
This announcement represents 2,000 more job losses than initially predicted when the bank revealed a 30 per cent fall in annual profits in February this year.
The investment arm will lose the most jobs, with about 7,000 jobs to be cut in the next two years, after it recorded a 49 per cent drop in pre-tax profits to £668 million in the first quarter of this year.
In total, 19,000 jobs will be cut by 2016, and about 10,000 will go in the UK, as Barclays aims to “reposition, simplify and rebalance”, proceedings.
The bank also announced the creation of ‘Barclays Non-Core’, a unit of assets that “do not fit the strategic objectives or returns criteria underlying the strategy review”, a statement on the bank's website read.
This includes £90bn of investment bank assets and all of its European retail banking operations, amounting to £16bn of assets.
Retail banking in Spain, Portugal, Italy and France will be shifted to non-core operations, while Africa banking will remain a longer-term growth business for the group.
The bank aims to focus on four core businesses including its retail operations in the UK and Barclaycard credit card: “a high returning business with strong and diversified international growth potential,” it said.
It will look to exit or run down ‘non-core’ assets over time.
“This is a bold simplification of Barclays,” Jenkins said. “We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage.
“In the future, Barclays will be leaner, stronger, much better balanced and well positioned to deliver lower volatility, higher returns, and growth.”
Barclays came under fire earlier this year when shareholders narrowly agreed plans to increase its staff bonus pool by 10 per cent to £2.38billion.
But Jenkins said he was determined to “create a Barclays that does business in the right way, with the right values, and delivers the returns that our shareholders deserve.”
Barclays currently operates in over 50 countries and employs approximately 140,000 people.
Jenkins said this new strategy would help position Barclays as the ‘Go-To’ bank for clients, customers, colleagues and shareholders.
Barclays interim results and further information under the new management structure is due at the end of July.