Barclays PLC (NYSE:BCS) (LON:BARC), on Tuesday, served a notice to its U.K. investment banking staff about potential job cuts. The job cuts are the result of the restructuring plans adopted by the bank to adhere to new regulations and a tougher business climate.
In a changed strategy, Barclays PLC (NYSE:BCS) (LON:BARC) Chief Executive Officer, Antony Jenkins, is trying to improve the culture at the bank, with increased focus on more profitable ventures amid tougher capital requirements and banking scandals. In June, the bank was fined a record 290 million pounds ($460 million) for manipulating LIBOR. The LIBOR scandal also resulted in the exit of its former CEO, chairman and chief operating officer.
Barclay’s Investment-banking head, Rich Ricci, said the bank could trim products and services which are not in the interest of bank, like parts of the bank’s tax advisory business and the sale of structured products to small-and medium-sized businesses.
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Britain’s second- largest bank have already started the process of consultation with all 9,000 of its U.K. investment-banking employees. As per the U.K. employment laws, when more than 100 jobs are at risk, companies are required to conduct a 90-day consultation process.
A formal review of the entire group, conducted by Chief Executive Antony Jenkins, will be presented along with a restructuring plan on Feb. 12. According to the persons familiar with the matter, about 2,000 of 23,000 global investment banking jobs may be axed for restructuring the company.
“This exercise is being carried out so that we can start to effect some of the strategic changes as a consequence of the Transform review of Barclays business, the outcomes of which will be announced on Feb. 12,” a spokesman said. “[the] Transform is explicitly intended to optimize the entire Barclays PLC (NYSE:BCS) (LON:BARC) business and to accelerate our already strong performance. The changes planned for the investment bank are wholly consistent with that intent.”
The banking industry is taking a blow from the current negative economic climate. Many of the largest banks in the U.S. are reporting negative news of some sort, and analysts think the hits could keep coming in the near future. In an earlier news, Morgan Stanley (NYSE:MS) altered its compensation plan for its brokers in an effort to raise more revenue and enable them to purchase discounted stock. JPMorgan Chase & Co. (NYSE:JPM) has also been reported to cut its bonus pool for its corporate and investment division by up to 2 percent.
Earlier, we reported on Citigroup Inc. (NYSE:C)’s cost-cutting measures, where the bank cut 11,000 jobs, taking a $1 billion charge to reduce next year’s expenses by $900 million and the following year’s expenses by $1.1 billion. Credit Suisse Group AG (NYSE:CS) recently announced more job cuts on top of the cuts it made earlier this year, and UBS AG (NYSE:UBS) announced that it would cut 10,000 jobs in October.