Tuesday, February 11, 2014
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.
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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 by £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.
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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.