Barclays set to cut up to 3,000 jobs
The bank has already cut 1,400 of the positions this year, chief executive Robert Diamond told reporters after Barclays Capital reported a 27% decline in pretax profit to £1.42 billion (€1.63bn) in the three months to June 30.
The total reduction in employee numbers in 2011 will be of the “magnitude” of 3,000, Diamond said.
Bonus restrictions mean bank profits “take the hit when volumes come down, when previously it was the staff — it’s the law of unintended consequences”, said Jane Coffey, head of British equities at Royal London Asset Management.
“There are job cuts across the City because most of the numbers have come down. They are having to look at their cost base,” she added.
Mr Diamond said: “One of the key planks of our returns focus is our cost programme, and it’s been really fun.
“Not that cutting costs is fun, but what’s been fun is that the executive committee has really come together and we found so many opportunities.
Mr Diamond added: “While the overall business environment for investment banking services is not as strong as we would like, Barclays Capital is on track to compete as a global top three player in each of the major categories in which it operates.”
European banks, including UBS, Credit Suisse Group and HSBC Holdings, have cut jobs during the past week after reporting falls in second-quarter investment banking profit as the continent’s sovereign debt crisis hurts trading.
HSBC yesterday pledged to eliminate 30,000 jobs by 2013, while Credit Suisse said last week it will remove 2,000 posts.
European banks have slashed 230,000 jobs since the start of the financial crisis in 2007, according to Bloomberg.
