Barclays Slashes 13,600 jobs in 9 Months to Restore Profitability

The cuts highlight the bank's stringent focus on costs after a freeze on hiring was imposed last September.

It has not been a popular year for banking giants such as Barclays, Deutsche Bank, and others who are continuing to face falling revenues and profits.

In a bid to cut costs and improve the bottom line, Barclays has slashed 13,600 jobs in the nine months since Jes Staley arrived as chief executive, equating to 10 percent of its staff, as per a report in Reuters. 

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

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Focus on Costs

The cuts underscore the bank’s stringent focus on costs which have in the main come from attrition and a freeze on hiring imposed in September which is still in place, together with cuts in its investment bank and Continental Europe operations.

At a Barclays banking conference for investors, Staley said: “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.”

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Staley is reported to have said at a conference in March that over 6,000 positions had gone in his first 100 days in his charge, a sharp acceleration in job reductions in the past four years, with the pace of cuts set to continue.

Increasing Pressure

Banks are facing increased pressure to cut costs in order to try to boost their profitability. Barclays is no exception to the rule and is aiming to get its costs to below 60 percent of income in the long term. Its cost/income ratio was 70 percent in H1 2016.

Staley is said to be happy with Barclays’ progress and would not be changing his strategy or the pace of delivery after Brexit, although he indicated that the bank might enhance its operations elsewhere as a result.

Staley also said that Barclays will also show “significant further progress” on running down its non-core assets in the second half of this year, confirming that the non-core unit will be closed by the end of 2017, when its risk-weighted assets will be reduced to less than £20 billion ($26.6 billion) from £47 billion ($62.4 billion) at the end of June.

As reported by Finance Magnates last month, Deutsche Bank CEO John Cryan also reiterated his stance on more cuts, stating that staff levels should be 30 percent lower. His words were hardly welcomed by Deutsche Bank employees, who to date have already survived a wave of job cuts and scaling measures across the company’s global operations.

 

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