By Marie Cabural. Originally published at ValueWalk.
Barclays PLC (NYSE:BCS) (LON:BARC) Plc may not cut jobs beyond 19,000 redundancies, contrary to media reports that the bank was planning to ax over 30,000 of its staff within two years. Citing people familiar with the developments, Reuters reports that Barclays hasn’t set any new targets to trim jobs beyond the 19,000 that was indicated in May of last year.
Barclays’ radical redundancy program
In May 2014, Barclayssaid it would slash 19,000 jobs by 2016 by pruning 7,000 jobs at its investment bank, while 14,000 jobs would be cut across the group in 2014. As detailed by ValueWalk, the British bank signaled a return to its retail roots by slashing much of its investment bank. Then-CEO Antony Jenkins defended his plans for job cuts and bonuses, saying the bank would refocus and resize its investment bank to bring balance to Barclays. Some felt Jenkins had fallen out with the board over strategy and the pace of cost cutting.
The Times reported today that Barclays is planning to trim over 30,000 of its staff within two years as it considers accelerating a group-wide cost-cutting program after firing its Jenkins this month. The report highlighted that a radical redundancy program that could lead to the lender’s global workforce falling below 100,000 by the end of 2017 is considered to be the only way to address the bank’s chronic underperformance.
Citing a senior source, The Times indicated that further job cuts would enable the bank to hit a target of doubling its share price. However, Barclays declined to comment on the reported job cuts. The lender will face pressure to clarify its plans when it unveils half-year financials results next week.
Barclays’ major cost-cutting initiative
Barclays is already witnessing a major cost-cutting program which saw 14,000 posts slashed last year and is expected to witness 5,000 more go by 2016, with dozens of branches also closing down. Following the exit of Jenkins, Chairman John McFarlane this month assumed the day-to-day running of the bank until a successor is appointed, working particularly closely with Finance Director Tushar Morzaria. The latest move resonates McFarlane’s actions at insurer Aviva, which he took over in May 2012.
According to The Times’ report, the bank’s new chief executive will have to sign on to a major jobs cull. Contrary to the report, which cites sources familiar with the developments, Reuters reports that Barclays has set no new targets to prune jobs beyond the 19,000 redundancies announced last year. However, one source reportedly indicated that it was possible thousands more jobs at the bank could go in the longer term as new technology enables it to automate some functions within its retail bank. The job pruning exercise could be focused in the middle and back office operations.
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