Barclays PLC (NYSE:BCS) (LON:BARC) CEO Antony Jenkins told shareholders today that the company may lay off as much as 28 percent of its work force in the next decade.
The executive sees increases in automation and internet banking as the major drivers of change in the business. The news was originally reported by Bloomberg.
The firm announced the job cuts in January that affected 9,000 positions.
According to people cited by the news agency, the remarks were made at a share holders meeting where the long term future of the company was discussed. Barclays PLC (NYSE:BCS) (LON:BARC) installed Shaygan Kheradpir Chief Operations and Technology Officer today; he will be in charge of the bank’s attempts to modernize.
A 28 percent reduction in staff members at the bank would leave Barclays PLC (NYSE:BCS) (LON:BARC) with around 100,000 employees worldwide. The worry is not just for employees at Barclay’s, however, this is a secular trend affecting the entire banking industry, and almost every other industry besides. The question is whether or not the jobs market can properly recover while the secular demand for labor decreases.
Many novels and research papers have been written about this subject, beginning in the nineteenth century. The general trend has been that those still employed in traditional industries are paid more because they are specialized. Those employees now have more money to spend, inflating the services industry providing jobs for those no longer demanded by traditional industries.
Service companies don’t just offer poorly paid positions either. They have all of the levels of upper management that the traditional firms do. This process has changed what we think of as traditional jobs in the last 100 year. The “traditional” auto industry would not have existed without increases in mechanization driving wages up for the middle class.
The change in the economy is being driven at an accelerated pace because of the global financial crisis. Companies have to make changes sooner because their bottom lines are changing faster. Barclays PLC (NYSE:BCS) (LON:BARC) seems ahead of the curve, promising job cuts over the next ten years.
The make up of the labor force is changing, this is definitely good for the Barclays PLC (NYSE:BCS) (LON:BARC) bottom line, though it may not be best for labor. The economy, and the free market, solved these problems before, we must hope it does so again.