Barclays to cut 3,700 jobsCurrent affairs
Barclays boss, Antony Jenkins, has announced that 3,700 jobs are going to be lost in order to try and reduce expenditure by an estimated £1.7 billion. The bank employs 140,000 members of staff, but maintains that very few job cuts will be taking place in the UK. Instead 1,900 job losses will be in the European retail and business banking sector, with a further 1,800 job cuts being made from corporate and investment banking in Asia.
Barclays is looking for ways to rebuild after certain events which have marred the reputation of the bank, such as its part in the Payment Protection Insurance (PPI) scandal and the £290 million fine it received when it attempted to rig the Libor interest rate.
Antony Jenkins has acknowledged these misdemeanours, but has also expressed the desire to learn from the mistakes made in the past and move on. He said: “I’d be the first to admit that Barclays has got things wrong in the past.”
In order to correct the mistakes made, the bank gave £1.6 billion compensation for those who were sold PPI that they didn’t need or ask for, as well as a further £850 million to compensate those who were wrongly sold interest rate hedging products. Jenkins went on to say that the most important thing now was to “learn from those experiences and build the future, and the plan that I’m laying out today is very clearly the way to do that”.
Jenkins has expressed the need for “pairing a strong sense of purpose and values with a very clear financial plan” in order to gain the appreciation of shareholders and help the bank to move forward. In his review, he stated his aims to keep investment in the UK, US and Africa as the main focus of the bank, whilst minimising the presence of the bank in Europe and Asia, hence the job cuts.
Equity analysist at Hargreaves Lansdown, Keith Bowman, approves of these changes saying that despite all of the issues which Jenkins has to face, the future is beginning to seem much more optimistic for Barclays. He said: “For now, despite a 60% plus gain in the share price over the last six months alone, the new chief executive looks to have done enough, with analyst opinion remaining positive in tone.”