Jan. 22 (Bloomberg) -- Barclays Plc, Britain’s second-largest bank, is preparing to cut jobs at its investment bank and has begun consulting with U.K. employees.
This “exercise is being carried out so that we can start to effect some of the strategic changes” to be announced on Feb. 12, the London-based bank said in a statement today.
Chief Executive Officer Antony Jenkins, 51, who took charge in August after the bank was fined a record 290 million pounds ($460 million) for manipulating Libor, is preparing to announce how he will revamp the bank. Shrinking the investment bank would partly reverse former his predecessor Robert Diamond’s expansion into equities and mergers advisory in Asia and Europe following its acquisition of the North American operations of Lehman Brothers Holdings Inc. in 2008.
Barclays started eliminating some European investment banking jobs in December and may make cuts in Asia in coming weeks, according to people with knowledge of the matter. The reductions may be equivalent to 5 percent to 10 percent of the investment bank, or about 2,000 employees, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The securities unit employs about 9,000 in the U.K. and about 24,000 people globally.
The firm has said it will eliminate businesses that are a risk to its reputation and aren’t profitable enough as regulators toughen capital requirements. Barclays’s investment-banking head, Rich Ricci, said in September the bank would review products and services that could harm its reputation, citing parts of the bank’s tax advisory business and the sale of structured products to small-and medium-sized businesses.
Investment banks are shrinking as revenue struggles to rebound amid Europe’s sovereign debt crisis. UBS AG, Switzerland’s largest lender, said in October it will cut about 10,000 jobs and retreat from some trading businesses. Morgan Stanley, with securities operations in London, plans to cut about 1,600 jobs from its investment bank and support employees, a person with direct knowledge of the matter said on Jan 9.
Financial firms have cut more than 115,000 jobs globally since the start of 2012 as banks seek to curb compensation costs and turn back from capital-intensive businesses, according to data compiled by Bloomberg.
“While the restructuring of investment banking at UBS is very much driven by the Swiss regulator, the changes that are to come at Barclays reflect more the structural change that we observe in banking,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics.
Employers cutting 20 or more jobs in the U.K. must hold a period of consultation where workers are told why their roles will be eliminated and what alternatives are available, according to the government’s information website.
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org