Barclays confirm up to 7,000 UK jobs to go


£5.2BN profit for Barclays banks

Barclays defied calls for pay restraint today as it announced a 10% hike in its staff bonus pool to £2.4 billion while confirming plans to cut up to 12,000 jobs this year.

The group said around 7,000 jobs would go in the UK - including some branch-based roles - under plans to slash costs across the group, adding that around half of the affected employees had already been informed.

It fuelled anger over City pay following a controversial bonus increase on last year's £2.2 billion haul, which comes despite a 32% drop in underlying annual profits to £5.2 billion.

The group's profit figures were announced yesterday, when the group took the unusual step of announcing its headline full-year results a day early.

The bumper payout will see its 26,200 investment banking employees share out a £1.6 billion bonus pot for 2013, up 13% on 2012, giving an average payout of £60,100 per employee in the division.

Chief executive Antony Jenkins defended the increase in staff incentives, saying the group believes in "paying for performance and paying competitively".

He also insisted the bank was "in a better position than we have been for many years".

But he added that Barclays had "more work to do" as part of its overhaul and admitted plans to reduce costs to £16.8 billion by 2015 would have a significant impact on its staff, with 10,000 to 12,000 job losses this year out of its 140,000-strong workforce.

This follows more than 7,600 jobs axed in 2013.

The latest cuts will affect employees across the bank, including customer-facing staff as well as senior managers, with 220 managing directors and 600 directors facing the axe.

Around 400 of those senior job cuts are from the investment bank.

Barclays said 1,700 of the overall job losses have already been announced.

Mr Jenkins also confirmed it would close some of its 1,600 UK branches over time in response to changing customer needs as more people bank online, but said there was no planned timescale.

Barclays recently denied speculation that it was considering closing a quarter of its branch network.

Trade unions blasted the bank, with Unite saying the bonus increase will drive up pay for those already on "unimaginably high salaries" at the expense of "ordinary" staff.

Dominic Hook, Unite national officer, said: "The culture change the bank promised will be less than skin-deep if those at the top still Hoover up obscene amounts of money while workers in call centres and branches struggle by on low wages and face the persistent pressure of job insecurity."

The TUC added it was "scandalous" that banks are still handing out multibillion-pound bonuses while Britons have suffered job losses, pay freezes and cuts to public services after the financial crisis.

"Barclays has stuck two fingers up to hard-pressed families across Britain by announcing another multibillion-pound bonus pool," said TUC general secretary Frances O'Grady.

Details of the job losses come as a further blow after Lloyds revealed 1,080 staff cuts across its retail, risk, operations and commercial banking divisions last month, although it said the cull was part of reductions previously announced.

The bonus payout comes in spite of another tough year for the group, in which it added £2 billion to its bill for customer mis-selling scandals and tapped shareholders for £5.8 billion in a rights issue in the autumn.

Mr Jenkins has already waived his entitlement to a bonus for 2013 worth up to £2.75 million, citing "very significant costs" suffered last year over a series of scandals and its cash-call on shareholders.

When asked if other directors and staff would follow his lead and forgo their bonuses, he said: "The chief executive is in a unique position of leadership and responsibility."

He added: "We compete in a global marketplace for talent and need to have the best people in the bank."

Bonuses will remain firmly in the spotlight when Lloyds Banking Group posts its full-year results on Thursday amid reports it is also set to announce an increase in payouts to nearly £400 million from £365 million for 2012.

Lloyds chief executive Antonio Horta-Osorio may come under pressure over his bonus plans.

He could be in line for up to £2.4 million - a maximum of 225% of his £1.06 million base salary - for 2013.

Barclays shares fell 4% after the results.

Pre-tax profits in the investment bank division slumped 37% to £2.5 billion over 2013, while income fell 9%.

Barclays said its overall underlying profit for the final three months of 2013 was significantly lower, plunging by £1.2 billion quarter on quarter to £191 million, after being dragged lower by factors including £331 million of previously announced litigation and regulation penalties.

It was also knocked by costs relating to its Project Transform overhaul.

Mr Jenkins launched a review of culture and practices in the wake of the bank's £290 million Libor-rigging fine, which led to the resignation of former boss Bob Diamond.

The group is also cutting costs under the shake-up, with aims to reduce them by another £1.9 billion.

It said the financial impact of the restructure continued to weigh on bottom line profits, although they still rose to £2.9 billion from £797 million in 2012, due largely to movements in the value of its own debt.

The Institute of Directors (IoD) criticised Barclays after results showed its bonus pool dwarfed the £859 million paid out in dividends to shareholders last year, despite increasing from £733 million in 2012.

Roger Barker, director of corporate governance at the IoD, said: "It cannot be right in any business for the executive bonus pool to be nearly three times bigger than the total dividend pay-out to the company's owners.

"The question must be asked - for whom is this institution being run?"

Business Secretary Vince Cable also called on the banking sector to curb pay.

"We need a responsible banking sector which rejects the bonus-fuelled culture of the past and puts the needs of consumers and businesses back at the heart of what they do," he said.

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