Barclays has cut about 5,000 jobs in the past year, as part of an effort to improve efficiency and reduce costs.
Barclays is estimated to have reduced about 5,000 jobs throughout the world in 2023, as part of its cost-cutting initiative which started late last year. The figure is around 5% of its total workforce at the moment.
The job cuts are expected to be a combination of actual redundancies and vacancies which will not be filled after all. The full details are expected to be revealed along with the bank’s earnings release on 20 February, but this cost-cutting plan is expected to be valued at about £1 billion (€1.16 billion).
The move has mainly impacted the Barclays UK chief operating officer function, as well as Barclays Execution Services (BX), as the group veers towards becoming less top-heavy.
A spokesperson for the investment bank highlighted that Barclays was doing this as “part of its ongoing efficiency programme designed to simplify and reshape the business, improve service, and deliver higher returns.”
Barclays looks towards more attractive opportunities
Barclays has been struggling for years with how its investment banking division has been doing, even leading to speculations of the group dropping thousands of investment banking clients. Doing so is expected to provide more capital for more profit-generating ventures.
The group has also faced a number of scandals entangling past CEOs in the past few years. Jes Staley, who was Barclays CEO for six years, faced allegations of a closer relationship with convicted paedophile Jeffrey Epstein, than previously revealed.
This led to a long and contentious battle with City regulators, ultimately leading to Staley stepping down in November 2021. In October, the UK Financial Conduct Authority banned Staley from holding any senior City role and fined him £1.8 million for failing to reveal the extent of his close relationship with Epstein.
In 2012, then-CEO Bob Diamond gave evidence to MPs over Libor-rate-rigging at the bank. Bob Diamond said at the time, however, that he did not know about the Libor-rigging there and that he did not feel personally to blame. “I don’t feel personally culpable but what I do feel is a strong sense of responsibility, a very strong sense that when we find mistakes, we recognise them, we are open about them,” he said.
When MPs suggested that he was responsible for bringing a cavalier, investment banking culture into the bank, he also rejected the claim.
Barclays also failed to hold on to its post-COVID April 2022 peak, with share prices dropping as much as 35% by the end of 2023. This has led to a cost-cutting drive becoming especially necessary right now, which the lender hopes will also create more room to hire more front-office personnel across its most important divisions.
More focus is also expected to be put on automation and technology in the coming year.
According to current CEO C.S. Venkatakrishnan, “We always modulate the size of our workforce everywhere in the world in which we are, and that’s what we will continue to do.”
Clients now want specialised – not universal – banking
Barclays is already on the lower end of valuations, compared to both major UK banks such as NatWest, as well as other Wall Street mammoths such as Morgan Stanley, Goldman Sachs and JP Morgan.
This is largely due to the majority of clients and investors no longer being attracted to universal banking, instead preferring much more specialised banks offering just one or two kinds of services, such as commercial or retail banking.
Furthermore, Barclays has also been criticised in the UK for failing to evolve or tailor its services to the economic conditions of the country, such as recession, or the post-financial crisis environment. These criticisms have mainly hit the bank’s credit card and fixed-income trading branches.