Barclays (LON: BARC ) Plc is reportedly preparing for a significant workforce reduction as it seeks to lower operational costs in response to quieter markets. The British bank is expected to dismiss about 5% of client-facing staff in the trading division and some dealmakers globally in the coming week, as per sources familiar with the matter.
These cuts form part of Barclays' annual culling of underperformers in its markets division and corporate and investment bank. The move mirrors a similar strategy by Goldman Sachs Group Inc (NYSE: GS )., which is also planning its annual cuts for next month.
The bank's Chief Executive Officer, C.S. Venkatakrishnan, has been under pressure to improve profits and boost the bank’s share price. To achieve these goals, Venkatakrishnan has committed to reducing expenses across the firm and has initiated a comprehensive review of strategy.
Despite the planned layoffs, Barclays has been actively hiring since the start of the year. Over five dozen managing directors and directors have joined the markets division, including Scott McDavid as global head of equities and Igor Cashyn as head of US inflation trading. Torsten Schoeneborn also joined from BNP Paribas (OTC: BNPQY ) SA as co-head of Group of 10 foreign-exchange trading.
In response to higher-than-usual attrition among dealmakers, which Venkatakrishnan attributed to organizational changes, Barclays has hired more than 30 managing directors and directors across the banking division.
However, these moves come amid a prolonged dip in deals and capital markets. Barclays, along with its rivals, has been affected by a slowdown following aggressive interest-rate increases by central banks worldwide aiming to control inflation.
Earlier this year, Barclays cut about 100 roles in its investment-banking group, following a previous elimination of around 200 jobs in the division last November.
In addition to these cuts, Barclays is also planning to restructure teams within its UK consumer-banking unit. The bank has begun discussions with the UK union Unite as it seeks to streamline operations in its domestic banking unit. While this will likely result in some roles being eliminated, employees may be offered roles elsewhere in the company.
The firm's UK division, which includes a mortgage business as well as personal and business banking, is under scrutiny as Barclays seeks to lower its cost-to-income ratio. As part of this effort, the company has already spent about £63 million ($78 million) in firmwide restructuring and redundancy costs in the first six months of the year.
Despite these challenges, Barclays remains committed to improving service for its customers by automating, digitizing and simplifying its offerings, according to Barclays Finance Director Anna Cross.
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