Barclays Plc (NYSE:BCS) (LON:BARC) is planning to move 4,000 jobs to low cost locations overseas by 2015 to cut costs, reports Howard Mustoe of Bloomberg. Britain’s second largest bank’s co-CEO of corporate and investment banking, Eric Bommensath, said that it will generate about 250 million pounds ($381 million) in savings.
Barclays Plc (NYSE:BCS) (LON:BARC) has already shifted more than 2,000 jobs to overseas locations over the past two years. The latest announcement includes jobs in the management and administration of the bank’s data and computers. The bank didn’t provide any details about where these jobs will be moved to.
Barclays Plc (NYSE:BCS) (LON:BARC) appointed Antony Jenkins as its CEO after being fined $450 million in the Libor rate rigging scandal. Jenkins has planned to clean up the bank, eliminating as many as 40,000 jobs over the coming years. He is reducing costs by eliminating layers of management to boost returns. Barclays Plc. (NYSE:BCS) (LON:BARC) booked about 514 million pounds in charges in April this year under the Transform program. Bommensath said that the bank will now have greater offshore and outsourced presence.
Barclays Has To Boost Leverage Ratio
Barclays Plc (NYSE:BCS) (LON:BARC) may be forced to reduce lending because it has to meet the 3 percent leverage ratio target by 2015. The Prudential Regulation Authority may ask it to speed up the process. Jenkins said that if PRA issues an acceleration request, the bank will have to take additional steps that will restrict its ability to lend to customers.
PRA is the banking supervisor unit of the Bank of England. On June 20, it asked British banks to raise 13.4 billion pounds in reserves to sail through the possible losses on fines, loans and other risks. Barclays Plc (NYSE:BCS) (LON:BARC) was required to raise an additional 1.7 billion pounds to increase its leverage ratio from 2.5 to 3 percent.
Other Banks Cutting Jobs As well
Banks are aggressively trimming their workforce, offloading unwanted assets and increasing capital reserves amid sluggish economic growth and tough capital requirements. In October last year, UBS AG (NYSE:UBS) announced it would lay off 10,000 workers from its investment banking unit. Commerzbank AG (ADR) (PINK:CRZBY) of Germany has announced to axe up 6,000 jobs by 2016. Morgan Stanley laid off 1,600 employees earlier this year. Citigroup Inc. (NYSE:C) has already eliminated 11,000 jobs. Credit Suisse Group AG (NYSE:CS) recently announced to cut further jobs after eliminating 2,000 employees in October 2012.
Barclays Plc. shares were down 2.23 percent to $17.11 at 3:24 PM EDT.