HomeBusinessBarclays expects to cut 12 000 jobs

Barclays expects to cut 12 000 jobs

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LONDON — Barclays expects to axe up to 12 000 jobs this year to cut costs and counter falling income at its investment bank, where profits slumped last year.

But it is also paying staff higher bonuses, risking a backlash from the politicians and taxpayers who bailed out much of the industry during the financial crisis.

The bank said on Tuesday that 7 000 of the jobs will go in Britain and half of the affected staff there had already been notified.

The latest cuts are not concentrated in any single business area.

Chief executive Anthony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, is pulling Barclays out of some investment banking activities as part of efforts to clean up standards and improve returns.

The bank last year targeted £1,7 billion in annual cost savings.

It said it paid £2,4 billion pounds ($3,9 billion) in incentive awards last year after raising bonuses in its investment bank by 13% despite the profit decline.

That helped to lift Barclays’ compensation-to-income ratio to 43,2% last year from 40% in 2012.

It said it was still aiming for a compensation ratio in the “mid-30s”. Jenkins defended the increases, saying Barclays had to compete with global rivals to recruit the best staff. He said the bank was having constructive talks with investors over pay.

“We need to recruit people from Singapore to San Francisco. We need the best people in the bank to drive long-term sustainable returns for our shareholders,” Jenkins told reporters on a conference call.

Shares in Barclays were down 1,9% at 0830 GMT. The bank had already released headline results showing its earnings dropped to £5,2 billion ($8,5 billion) last year, down 32% from 2012, falling short of analyst forecasts as investment bank revenue slumped in the fourth quarter. Profits at the investment bank slumped 37% to £2,5 billion, as income fell 9% on the year to £10,7 billion due largely to a decrease in fixed income.

Barclays said it expects to improve its leverage ratio to at least 3,5% by the end of next year as it reduces its balance sheet.

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