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Barclays to cut 3,700 jobs

Barclays bank will cut 3,700 jobs despite a 26% rise in adjusted pre-tax profits to £7.048bn, it was announced in the bank’s final results.

The bank said it is trying to cut £1.7bn in costs and improve standards, and set out its aim of becoming the “Go-To” bank because of its renewed performance and values.

1,800 jobs will be lost from Barclays corporate and investment bank, with most lost in Asia, while 1,900 will be cut from the bank’s European retail and business bank.

Statutory pre-tax profits actually dipped dramatically from £5,879m to £246m year-on-year, while profits at Barclays’ investment bank rose by 37% for the full year.

Antony Jenkins, who joined the bank as chief executive in August 2012, said there was “no doubt” the last 12 months had been “difficult” for Barclays.

He admitted behaviours in the organisation had become “too aggressive, too focussed on the short term, and too disconnected from the needs of customers and clients, and wider society.”

He continued: “We know that we have a great deal of work to do. We know that we will be judged by our actions, not our words.

“We are completely committed to becoming the ‘Go-To’ bank - for our customers and clients; colleagues; investors; and wider society.”

Bonuses were reportedly down by 16% in the past year, while average employee bonuses dropped by 13% to £13,3000.

The bank also said average bonuses paid to investment bank staff fell by 17% to £54,100, while debts were reduced by £4.6bn.

Mr Jenkins concluded: “The pursuit of profit that is achieved in ways inconsistent with that purpose and those values will not be tolerated.

Professor of Organizational Behaviour, Andre Spicer, from the Cass Business School commented: “I believe Barclays will only be a valuable business if it is a values-driven business.

“We must operate to the highest standards if our stakeholders are to trust us and bring their business to Barclays. Our long-term performance depends on it.

“The strategy set out by Barclays’ CEO today is not about profit. It’s about rebuilding the legitimacy of the bank. He is trying to win back the trust of investors, regulators and the broader public.

“To do this he has made some significant changes including refocusing the business and punishing the investment bankers.

“By cutting back the investment banking division, it appears Barclays is willing to kill the golden goose which has produced a significant chunk of its profits in the past.

“This move is a gamble. It will inevitably lead to lower rates of profit in the future. It is also built on a move into an already crowded sector of the market – wealth management. It comes with significant collateral damage – 1,900 people will go in retail banking.

“The strategy relies on a long and difficult process of culture change within the bank. While culture change may be sorely needed, actually delivering it will prove to be a very difficult task.”

This was posted in Bdaily's Members' News section by Miranda Dobson .