Barclays to cut 12,000 jobs, pays bigger bonus

February 12, 2014 - 4:53:50 am

LONDON: Barclays said it would axe up to 12,000 jobs this year even as it raised bonuse for investment bankers, prompting fury among politicians and unions who said it had not learned the lessons of the financial crisis.

Britain’s third-biggest bank said up to nine percent of employees could go, including 7,000 in Britain, as it tries to lower costs. The cuts are not concentrated in any one business area. 

It said it paid £2.4bn ($3.9bn) in incentive awards last year, raising bonuses at the investment bank by 13 percent despite a slump in its profits. The average bonus for the investment bank’s 26,200 staff was 60,100 pounds. 

Critics of the bonus hike said it showed Britain’s biggest banks were still failing to heed the lessons of a financial crisis caused by dangerous risk taking and excessive pay. 

“Today Barclays has stuck two fingers up to hard-pressed families across Britain by announcing another multi-billion pound bonus pool,” said Frances O’Grady, General Secretary of the Trades Union Congress.   

Barclays Chief Executive Anthony Jenkins, who took the helm in 2012 after an interest rate rigging scandal, has vowed to improve culture and standards at the bank while also reducing risk and strengthening the balance sheet.

But its investment bank profits slumped 37 percent last year to 2.5 billion pounds and analysts voiced concern about whether Jenkins can reach his target of a return on equity above 11.5 percent by 2016.

Reuters

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