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Barclays, spearheaded by Chief Executive CS Venkatakrishnan, known as Venkat within the bank, is reportedly devising a substantial cost-saving plan amounting to around 1 billion pounds ($1.25 billion). This initiative may involve slashing up to 2,000 jobs, primarily in the bank's back-office operations, according to a source familiar with the matter speaking to Reuters.
While Barclays declined to comment on the potential job cuts, the proposed measures aim to bolster the bank's profitability. The envisaged cuts are primarily targeted at Barclays Execution Services (BX), an internal division, and form part of an overarching goal to trim expenses by up to 1 billion pounds across the organization over the course of several years.
Though Barclays has previously reduced costs by cutting bonuses and positions in retail and investment banking, focusing on downsizing BX and the resulting cost savings has not been previously disclosed.
Source: Barclays
The proposed 1 billion pound cost-saving objective equates to approximately 7 percent of the bank's underlying annual operating expenses, which stood at 15 billion pounds in 2022. Discussions regarding staffing at BX are ongoing, with the possibility that Barclays might prioritize layoffs in other segments of the bank, according to the source.
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BX's workforce has notably expanded in recent years, reaching approximately 22,300 by the end of 2022 from 20,000 in 2017, representing over a quarter of Barclays' total staff, as per regulatory filings. Concurrently, annual staff costs at BX have risen from 1.8 billion pounds to 2 billion pounds.
Venkat faces mounting pressure to elevate Barclays' declining book value ahead of an investor presentation slated for February, during which he intends to unveil a revised strategy. Since assuming the CEO position, he has grappled with the repercussions of a significant trading mishap that incurred substantial losses for the bank.
Source: Salesforce
Moreover, retaining morale within Barclays' investment bank is proving challenging due to an ongoing talent drain, impeding the bank's ability to compete with European counterparts like Deutsche Bank, BNP Paribas, and UBS.
Barclays' share price has declined by 26 percent since Venkat assumed leadership on November 1, 2021, contrasting with the relatively stable performance of Deutsche Bank's shares and a 37 percent increase in HSBC's shares.
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