Barclays is on the brink of reducing its workforce by up to 2,000 positions as part of a sweeping £1 billion cost-saving endeavor to bolster its profitability. The plans for job redundancies surfaced recently, primarily impacting departments such as legal, human resources, and compliance, excluding roles in customer-facing branches or the investment banking sector.
Strategy to Reduce Expenses
The move aligns with Barclays’ CEO, CS Venkatakrishnan’s strategy to curtail expenses within the organization, responding to pressures from the financial district to uplift the bank’s dwindling share prices.
The restructuring drive is anticipated to focus on the segment internally known as Barclays Execution Services, where the shift towards digitization has rendered numerous roles redundant. Currently employing around 87,000 individuals globally, Barclays houses 44,000 workers in the UK alone.
Venkatakrishnan also referred to as Venkat, hinted at reshaping the bank’s expenditure trajectory last month, emphasizing room for improvement across various bank divisions. The announcement comes amidst a 15% decline in Barclays’ shares this year, resulting in diminishing profits, prompting stakeholders to urge Venkat to reinvigorate the institution’s financial standing.
Analysts predicted a cost reduction between £500 million and £1.5 billion. Benjamin Toms, an RBC analyst, highlighted the significance of these cost actions for investors, foreseeing the unveiling of the plan’s magnitude and potential advantages.
Accompanying the imminent job cuts, the bank is anticipated to downsize its office spaces, contributing to overall cost reductions. The bank is expected to disclose further details regarding the layoffs during the full-year results announcement slated for February.
While previously warning investors of substantial cuts as part of an impending strategic review, Barclays’ current financial status depicts stabilized costs, hinting at the potential for increased shareholder value through further savings.
Proposing an Overhaul
Venkat’s proposed overhaul marks a pivotal move since assuming leadership in 2021, following his role as chief risk officer. Similar maneuvers to streamline operations have been witnessed at rival banks like Citigroup, evidencing the intensified competition in the banking landscape.
Although the bank refrained from explicitly terming Venkat’s actions as a “restructuring,” the impending shake-up is poised to reduce administrative roles significantly, possibly altering the bank’s operational landscape. This news arrives in tandem with Barclays’ recent announcement of plans to close an additional 16 bank branches in early 2024.
Barclays declined to provide comments regarding the impending changes.