Barclays Chief Jenkins Hints At Jobs Axe
The chief executive of Barclays has suggested that the growing automation of banking services could result in tens of thousands of jobs disappearing from its workforce during the next decade.
I have learned that during meetings with leading shareholders following Barclays' annual results last month, Antony Jenkins said that he envisaged a future in which the bank employed as few as 100,000 people. Barclays currently employs approximately 140,000 staff.
Mr Jenkins is understood to have discussed during the investor meetings the objective of Barclays becoming a self service-oriented company which allows its remaining staff to focus on delivering "added value" to customers and clients across its retail, investment and wealth management operations.
The suggestion by Mr Jenkins could stoke concerns that he is planning a vast redundancy programme, although a Barclays insider insisted that Mr Jenkins had not been setting a formal target for job cuts and that his comments should be regarded as "blue-sky thinking about the long-term future".
"He was talking about how the bank needs to be more efficient in general terms," a person close to Mr Jenkins said. "It's about how we do the same or more with a smaller headcount, but there is no specificity about how much smaller."
Even so, the reference to such a potentially dramatic reduction in the size of Barclays' workforce is inflammatory, given Mr Jenkins' effort to position it as the 'Go-To' bank for stakeholders. Mr Jenkins took over as chief executive in the wake of the Libor-rigging scandal that saw Barclays fined £291m by regulators in the UK and US.
His comments come as banks face growing pressure from investors to make themselves more efficient amid pressure from regulators to hold more capital. The major UK-based banks have consistently underperformed in terms of delivering returns to investors since the financial crisis because of their bloated cost bases, and have been under pressure to reduce bonus pools in order to deliver more capital to shareholders.
Barclays has more than 1,650 branches in Britain, employing tens of thousands of people. Achieving job reductions on the scale implied by Mr Jenkins during his recent meetings would, insiders said, principally involve Barclays' investment bank's back office as well as the closure of some branches both in the bank's home market and overseas, although a spokesman said that such actions were not on the bank's immediate agenda.
Any large-scale closure of UK branches would entail further bad news for high streets ravaged by the collapse of a string of prominent retailers.
Mr Jenkins has already set out a concrete cost reduction programme at Barclays, which will involve £1.7bn being eradicated from the bank's cost-base by 2015. 3700 jobs will be axed as part of the plan to address costs, which the Barclays chief executive referred to last month as a "strategic battleground".
Many of the proposed job cuts are taking place within Barclays' investment banking arm, with the bulk of the rest focused on its retail banking operations in troubled Eurozone countries such as Italy and Spain.
Accompanying last month's full-year results, in which Barclays reported a profit of £246m, Mr Jenkins gave a presentation about the future of the bank in which he referred to the "21st Century industrialisation" of the industry.
The "large-scale focused automation of core processes", "globalisation of processes [and] reduced real-estate footprint" and "customer and client-centric self-service via best-in-class digital and mobile" were all signalled by the Barclays chief in his presentation.
Barclays has been a pioneer in internet and mobile-based banking and payment services, including through its money-transfer app, Ping-It, which has been hugely popular as customers increasingly switch to digital channels.
One investor said Mr Jenkins' presentation underlined his determination to overhaul Barclays in a more radical way than even that attempted by Bob Diamond, his predecessor.
Barclays declined to comment on Mr Jenkins' remarks.