Barclays Bank Wields the Axe 2,000 Jobs to be Cut in Ambitious $1.25 Billion Cost-Cutting Plan

Barclays Bank to Cut 2,000 Jobs in $1.25 Billion Cost-Cutting Plan

Barclays, the London-based financial giant, is planning to trim costs by a whopping £1 billion ($1.25 billion). Rumor has it that this cost-cutting spree may result in the elimination of 2,000 jobs. Talk about tightening the belt! The cuts are expected to take place in the back office roles at Barclays Execution Services. It seems that the bank’s CEO, C.S. Venkatakrishnan (or as we like to call him, “Venkat”), is doing a deep dive into the bank’s profitability and expenses.

Now, it’s still unclear which other departments will be affected or how long the layoffs will span. So, let’s hope for the best and keep our fingers crossed.

Of course, Barclays has been in cost-cutting mode for a while now. Earlier this year, they turned their eyes to bonuses, saying bye-bye to some of those grand rewards. But it seems that wasn’t enough. In their third-quarter earnings report, Barclays mentioned their plans to restructure and reduce costs. They even dropped a hint about material additional charges in the fourth quarter. Ouch!

Speaking of earnings, Barclays reported a slight dip in pre-tax profit for the third quarter compared to the same period last year. The culprit behind this decline? A 6% drop in their core investment banking segment. It seems like the deal volume was playing hide and seek. And let’s not forget about the 13% decline in revenue from fixed income, currency, and commodities trading, all thanks to good old market volatility.

Worry not, my dear reader, for Barclays is expected to unveil their strategy for the next year when they announce their full-year results in February. That’s right around the corner!

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But let’s not forget about the challenges Barclays faced throughout 2022. They had to deal with the fallout of a trading error, which resulted in several billion dollars being accidentally issued without proper authorization. Whoopsie daisy! They had to settle with the U.S. Securities and Exchange Commission for a cool $361 million. And let’s not even get started on the $565 million they had to set aside for compensating investors. It seems like a classic case of “oops, we did it again.”

And that’s not all! Barclays also had to cough up $200 million in costs for a regulatory probe involving their employees using personal messaging apps to discuss market-sensitive matters. It’s like they were saying, “Hey, let’s make it personal and sensitive!” Not a great idea, folks.

Since Venkat took the helm in November 2021, Barclays’ shares have been on a downward spiral, falling a whopping 26%. Meanwhile, their competitors, like HSBC, have been soaring high with a 37% increase in their share price. It’s like watching a game of seesaw, but instead of fun, it’s just a rollercoaster ride of emotions for Barclays.

So, what’s next for Barclays? Well, the bank started a strategy review earlier this year to pump some life back into their sliding share price. But it seems like the pressure just keeps mounting. From rising costs to economic challenges, Barclays is feeling the heat. As AJ Bell investment director Russ Mould put it, “Reports of Barclays targeting £1 billion in cost cuts reflect the challenges facing the banking sector, despite higher interest rates, as inflationary pressures continue to weigh.” Talk about a test of fire!

Now, let’s grab some popcorn and see how this story unfolds. Will Barclays manage to turn the tide and restore its former glory? Only time will tell. In the meantime, stay tuned for more updates, my fellow finance enthusiasts!