Barclays has begun a ‘process of consultation’ with its staff over hundreds of job cuts. There are 10,000 employees in the London investment banking arm alone, 23,000 in total worldwide, so this represents a cull of just less than 10%.
Jenkins is undertaking this process as part of Barclays’ Transform review. He is attempting to overhaul the bank’s reputation in the wake of the Libor scandal and ongoing PPI investigations. The report will be published next month but Jenkins has been dropping plenty hints about what it is to contain.
This is definitely no softly softly approach. Last week, Jenkins issued a stern warning to all staff that all those unwilling to stand by Barclays’ new code of ethics would be out on their ear.
Barclays will let staff know who is to stay and who is to go by mid February. It is understood that the more ‘controversial’ divisions of the bank, such as commodities trading, could be targeted.
Controversial maybe, but this division, alongside the whole investment arm as a whole, contributes more that half of Barclays overall profit.
Jenkins is willing to sacrifice short-term profit in order to repair Barclays reputation, but how long he maintain such a strategy?
With competition between UK banks more frenzied than ever, and pressure mounting from rival institutions across the pond, isn’t dumping Barclay’s biggest earner perhaps yet another example of a bank courting unnecessary risk?