You are here
Barclays said cutting 1,000 jobs, about 230 eliminated in Asia
[LONDON] Barclays Plc Chief Executive Officer Jes Staley has started a fresh round of cuts at the investment bank, with plans to eliminate more than 1,000 jobs worldwide and exit several Asian countries, people with knowledge of the matter said.
The UK bank plans to cut about 230 jobs in the Asia-Pacific region, including winding up its cash equities business in the region, one of the people said, asking not to be identified because the decision isn’t public.
It will exit operations in Australia, Taiwan, South Korea and Malaysia and plans to maintain offices in Hong Kong, China, Japan, Singapore and India and keep its prime brokerage and derivatives business in Asia, the person said.
Mr Staley, a former JPMorgan Chase & Co banker who took over last month, is seeking ways to boost earnings growth and restore investor confidence by focusing on the bank’s most profitable businesses. He and Chairman John McFarlane are scheduled to present a broader strategic update alongside the bank’s full- year results on March 1.
A spokesman for Barclays in London declined to comment. The Financial Times reported earlier that the company will cut about 1,000 jobs.
The bonus pool for the investment bank may be cut by at least 10 per cent from the previous year, one of the people said. The bank, which hasn’t made a final decision on compensation, plans to pay bonuses in March, later than the usual mid-February timing, according to a separate person.
The investment bank’s bonuses fell 24 per cent to 1 billion pounds (S$2 billion) in 2014 from 1.3 billion pounds in the previous year, according to the bank’s annual report. Total compensation costs for the division fell 9 per cent to 3.6 billion pounds from 4 billion pounds over the same period.
Barclays fell 4.1 per cent to 182.05 pence in London on Wednesday, tracking a global rout in equity markets and extending its decline to 17 per cent so far this year. The stock lost about 10 per cent in both 2014 and 2015.
Mr Staley was hired as CEO after McFarlane fired Antony Jenkins over the perceived slow pace of restructuring.
Mr Staley is the latest CEO to deepen cuts at its securities units as banks shrink to restore profit growth amid tougher capital rules and a cooling global economy. Morgan Stanley CEO James Gorman said this week he was “effectively done” with about 1,200 job reductions in fixed-income trading after concluding the outlook for the business is poor.
At Deutsche Bank AG, co-CEO John Cryan plans to eliminate about 9,000 jobs on a net basis by 2018, while Standard Chartered Plc CEO Bill Winters plans to cut 15,000 jobs to help save US$2.9 billion by 2018.
The Barclays CEO extended a hiring freeze indefinitely in December after discovering the bank had only cut about 3,000 positions since 2012 because it continued “hiring tens of thousands of people every year” during an earlier job-reduction programme.
While the securities unit, headed by Tom King, contributes about a third of the bank’s revenue, it has the lowest profitability of four units with a 2.7 per cent return on equity in 2014.
“Our focus is on the US and the UK with a global network that’s right-sized and that will be measured on profitability and returns,” Mr King said of his strategy at a conference in September. “But all the time we’re monitoring our geographies, we’re monitoring our products, and we’re making adjustments.”