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UK bank to sack 12,000 despite profits surge

Barclays says it has to cut costs, after announcing profits and an increase in bonuses for its investment arm.

Last updated: 11 Feb 2014 13:52
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The average bonus to investment bank staff was $100,000 [AP]

Barclays bank is to axe up to 12,000 jobs this year even as it raised bonuses for investment bankers, prompting fury among politicians and unions who said it had not learned the lessons of the financial crisis.

Stepping up efforts to cut costs, Barclays said up to 9 percent of employees could go, including 7,000 in the UK, where
half of the affected staff had already been notified. The cuts are not concentrated in any single business area.

Britain's third-biggest bank said it paid $3.9bn in incentive awards last year after raising bonuses at the investment bank by 13 percent despite a slump in profits from the business.

Barclays also announced  that a strong performance by its retail arm helped lift group profit after tax to £886m last year, compared with a net loss of $1bn in 2012.

The average bonus across the investment bank's 26,200 staff was about $100,000. The combination of lay-offs and fatter bonuses drew indignation from Britain's biggest labour union. 

"The culture change the bank promised will be less than skin deep if those at the top still hoover up obscene amounts of
money while workers in call centres and branches struggle by on low wages and face the persistent pressure of job insecurity," said Ciaran Naidoo of Unite the Union.

Barclays chief executive Anthony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, is attempting to improve culture and standards while also reducing risk and strengthening the balance sheet.

He defended the bigger bonus pot, saying the bank had to recruit the best staff to compete with global rivals and continued to have "constructive" talks with investors over pay. 

"We need to recruit people from Singapore to San Francisco. We need the best people in the bank to drive long-term sustainable returns for our shareholders," Jenkins told reporters on a conference call. 

"I understand that there will be some (people) who feel that this decision is the wrong one for Barclays. But it is the decision of the board and myself that this entirely is the right decision for the group and in the long-term interests of shareholders," he said.

The bank also cut 7,650 jobs last year, including 1,400 in the investment bank, as part of a restructuring unveiled a year ago. There were 139,600 Barclays employees by the end of the year. 

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Source:
Agencies
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