Barclays to cut more than 30,000 jobs
Barclays is planning to cut more than 30,000 jobs within two years. The radical reduction program could reduce the bank's global workforce below 1,00,000 by the end of 2017. This was thought to be the only way to address underperformance and to hit the target of doubling the company's share price. The job cuts would mostly affect the middle and back office operations.
Libor scandal arose when it was discovered that some banks artificially inflated or deflated their interest rates so as to profit from trades, or to give the impression that they were more creditworthy than they actually were. In June, Barclays settled charges that it manipulated Libor for its own benefit by submitting falsified numbers. Some others involved include: RBS, Deutsche Bank & JP Morgan.
London Interbank Offered Rate (Libor) is the average interest rate calculated through submissions of interest rates by major banks in London. Thomson Reuters calculates and publishes it everyday just after 11 am.
After the Libor scandal broke, Barclays CEO Bob Diamond stepped down. The investment arm which represented 53% of the Barclays total profit in 2011 had to undergo shrinking, given the greater regulatory and political intrusion, following the scandal. It was thought that whoever took over as the CEO would try to reduce the scale of the investment bank.
Barclays appointed Antony Jenkins as Chief Executive, following the exit of Bob Diamond. Jenkins, the former retail banking chief, was seen as the best internal choice. According to analysts, the immediate task at hand for Jenkins was to get a grip on the investment banking business which was still one of the biggest in the world and a major profit generator for the company.
In Feb 2013, Barclays announced 3700 job cuts, to reduce costs. Almost half of these cuts were in the bank's investment arm. In May 2014, CEO Jenkins said that the bank would cut 19,000 jobs over the next three years. 12,000 of these cuts were set to be made in 2014. Scaling down its investment bank seemed the main focus of cut down.
Barclays fired its Chief Executive Antony Jenkins after a row with the board over the future of the bank's troubled investment division and the slow pace of cost cutting. Jenkins was to be temporarily replaced by John McFarlane, the bank's chairman. His appointment was designed to "accelerate the pace of execution." When asked about job cuts, McFarlane did not rule them out.
