Barclays Rumored to Implement $1.25 Billion Cost Plan, Potentially Resulting in 2000 Job Cuts – Source

Last Updated on November 24, 2023 by Robert C. Hoopes

Barclays, one of the leading banks in the UK, is reportedly planning to save up to £1 billion ($1.25 billion) by cutting around 2,000 jobs, mainly in its back office division. The potential job cuts would primarily affect Barclays Execution Services (BX), a unit that was created to enhance efficiency but has now become bloated.

The savings plan is part of a broader initiative by Barclays to reduce expenses by as much as £1 billion across the entire group over the course of several years. Financial analysts believe that these potential savings could instill confidence in investors, who had previously only received vague estimates regarding the costs associated with the bank’s restructuring efforts.

In the past, Barclays has attempted to control expenses by cutting bonuses and jobs in its retail and investment banking departments. However, this is the first time that cost reductions at BX and the potential savings have been reported.

BX, established in 2017 to consolidate support functions for Barclays’ main business divisions, has witnessed a significant growth in its headcount and costs over the past few years. The unit plays a crucial role in improving the bank’s overall operational efficiency.

Barclays’ CEO, C.S. Venkatakrishnan, popularly known as Venkat, is now facing pressure to enhance the bank’s declining book value before an investor presentation scheduled for February. During the presentation, Barclays will unveil its fresh strategy to convince shareholders of its plans to improve the bank’s valuation.

Since Venkat assumed the role in November 2021, Barclays’ share price has plummeted by a staggering 26%, while other British banks have experienced minimal changes or slight gains. Consequently, Venkat has emphasized the need for further restructuring within Barclays as part of the preparation for the crucial February presentation.

Managers at BX have already been operating with frozen budgets this year and have been informed that costs must be reduced by 2024. The upcoming job cuts at BX are expected to play a significant role in achieving these cost reductions.

Barclays’ shareholders and the financial community at large eagerly await the unveiling of the bank’s new strategy in February, hoping that it will provide a much-needed boost to the bank’s valuation and restore investor confidence.