Barclays Chief Hints At Huge New Job Losses
The chief executive of Barclays effectively ruled out a full-scale retreat from investment banking on Thursday but warned that a shake-up of the group potentially costing thousands more jobs at the division would be unveiled within weeks.
In a memo to staff obtained by Sky News, Mr Jenkins said a review to be announced on May 8 would answer questions about the future of Barclays, including how best to simplify the bank's sprawling operations and which of its businesses it "should focus on and invest in".
In the note, Mr Jenkins said he wanted to set out a clear path "to build a better Barclays which can deliver sustainable returns and growth over the cycle" amid increasing shareholder concerns about the bank's financial performance.
The bank's chief executive said that the May review, which will come just 16 months after he unveiled 'Transform', his programme to make Barclays more efficient, had been necessitated by ongoing industry and economic changes.
"Regulatory developments and the macro-economic environment are having a significant effect on some parts of our business which we need to address proactively and decisively," he said.
He moved, however, to end speculation that he might decide to break the group up altogether, saying: "The future for Barclays will be as a strong, focused, international bank. And the investment bank will continue to be a part of that mix."
Shareholders have complained about the pace of Mr Jenkins' cost-cutting measures as well as a 10% rise in variable pay in 2013 to £2.4bn despite a slump in profits.
City investors have set the scene for a showdown with Barclays at next week's annual general meeting over pay and bonuses, prompting it to recruit a new board member responsible for navigating remuneration issues, revealed by Sky News earlier this week.
Last year, Barclays raised nearly £6bn by selling new shares to investors at the behest of UK regulators.
A separate stock exchange statement announcing the timing of next month's review was also issued on Thursday.
Mr Jenkins' staff note is likely to mean that thousands of additional jobs will be axed at Barclays' investment bank, analysts said.
At its full-year results in February, he had signalled that roughly 12,000 roles would disappear across the group this year, with this number now likely to be revised up as part of Project Electra, the internal codename for the investment bank review.
A further announcement about a reorganisation of the markets business within Barclays' investment bank, which will involve appointing new management beneath Tom King and Eric Bommensath, the co-chief executives, will be made later on Thursday, a source said.
The reshaping of Barclays' investment bank, which employs about 25,000 people, has been taking place for several months.
It comes amid a broader slowdown affecting global investment banks' fixed-income businesses.
Barclays declined to expand on the remarks in Mr Jenkins' memo.