Barclays has had a troublesome few months with tumbling share costs and weak third-quarter outcomes. Now, the British lender is reportedly planning to hold out a spherical of sweeping layoffs as a part of a cost-cutting program price a billion {dollars}.
The London-headquartered Barclays is engaged on plans to slash prices by as a lot as £1 billion ($1.25 billion) which might together with reducing 2,000 jobs, Reuters reported Thursday, citing folks with information of the matter.
The cuts would concentrate on again workplace roles at Barclays Execution Companies, the outlet reported. The proposal, geared toward boosting the financial institution’s profitability and curb bills, continues to be being reviewed by high administration together with CEO C.S. Venkatakrishnan or “Venkat.”
It’s unclear which different departments may be impacted or what the general timeframe for the potential layoffs is.
A consultant at Barclays declined Fortune‘s request for remark.
Barclays has been attempting to place a lid on prices together with by reducing bonuses earlier this yr. In its third-quarter earnings report, the financial institution hinted at restructuring plans, saying it was “evaluating actions to reduce structural costs to help drive future returns,” which can mirror materials extra fees within the fourth quarter.
The corporate reported pre-tax revenue for the third quarter barely under the identical interval a yr earlier, with a 6% drop in its core funding banking section amid decrease deal volumes. Income on the firm’s fastened revenue, foreign money and commodities buying and selling division declined 13% because of market volatility.
Barclays is anticipated to debate its technique for the next yr when it pronounces its full-year ends in February, in keeping with Reuters.
A rocky 2022 for Barclays
The lender has had different challenges to navigate—together with the fallout of a buying and selling error that resulted in a number of billion {dollars} being unintentionally issued in structured monetary merchandise with out authorization. Barclays needed to settle with the U.S. Securities and Change Fee for $361 million, whereas setting apart about $565 million to compensate buyers, in keeping with the Monetary Occasions.
Individually, the financial institution confronted $200 million is prices for a U.S. regulatory probe involving worker use of non-public messaging apps akin to Whatsapp to debate doubtlessly market-sensitive issues.
Since Venkat took over in November 2021, the corporate’s shares have fallen 26%, whereas these of its opponents like HSBC have shot up by 37%.
Barclays started a method evaluate earlier this yr to avoid wasting its sliding share value. Stress on the financial institution continues to mount because it tackles varied cost- and economy-related challenges.
“Reports Barclays is targeting £1 billion in cost cuts reflect the challenges facing the banking sector, despite higher interest rates, as inflationary pressures continue to weigh,” AJ Bell funding director Russ Mould stated in a be aware Friday.
“It also suggests CS Venkatakrishnan is starting to feel some pressure with the shares appreciably lower since his appointment in November 2021.”
