Barclays to cut 12,000 jobs as earnings drop

[LONDON] Barclays Plc expects to axe up to 12,000 jobs this year to cut costs and counter falling income at its investment bank, where profits slumped last year. But it is also paying staff higher bonuses, risking a backlash from politicians and taxpayers who bailed out much of the industry during the financial crisis.

The bank said yesterday that 7,000 of the jobs will go in Britain and half of the affected staff there had already been notified. The latest cuts are not concentrated in any single business area.

Chief executive Anthony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, is pulling Barclays out of some investment banking activities as part of efforts to clean up standards and improve returns. The bank last year targeted £1.7 billion (S$3.5 billion) in annual cost savings. It said it paid £2.4 billion in incentive awards last year after raising bonuses in its investment bank by 13 per cent despite the profit decline.