Barclays To Cut 3,700 Jobs As Part Of Its 'Project Transform'

Barclays layoffs job cutsBy Steve Slater
and Matt Scuffham

LONDON -- Barclays new chief executive pledged a fresh course for the British lender on Tuesday, axing at least 3,700 jobs and pruning its investment bank as he seeks to rebuild its reputation and boost profitability after a series of scandals.

In an attempt to distance the bank from the aggressive, high-risk culture championed by his predecessor, Antony Jenkins said that Barclays would put ethics above earnings at the bank, which has become a focus for public anger at the excesses of the financial sector.

"Barclays is changing. There will be no going back to the old way of doing things. We get it, we are changing the way we do business, we are changing the type of business we do," Jenkins told a news conference.

"We must act at all times with good values."

Jenkins unveiled his grand plan, dubbed "Project Transform," at London's Royal Horticultural Halls, an Edwardian exhibition space well away from the bank's skyscraper headquarters in Canary Wharf and just a short walk from Parliament, where lawmakers have heavily criticized the bank for its misdeeds.

Keen to convince a skeptical public that Barclays can change, Jenkins has cut the average bonus for its investment bankers, halted trading in soft commodities "for speculative purposes" and closed its structured capital markets division, which one lawmaker last week said advised clients on "industrial scale tax avoidance".

Jenkins said that he had full confidence in his executive team but declined to answer questions about the future of Rich Ricci, head of Barclay's investment bank, where many of the scandals emanated.

"I can't predict the future," he said.

Investors applauded the bank's plans to raise its dividend and slice 1.7 billion pounds (about $2.7 billion) in annual costs, including cutting 1,800 jobs in corporate and investment banking and 1,900 in its European retail and business banking.

"A commitment to cost reductions and evidence of cost control in the investment bank bonus pool have spurred today's renewed optimism," Simon Maughan, strategist at Olive Tree Securities, said.

Barclays shares were up 4.42 percent by 1140 GMT, the best performer in a European banking index up 1.12 percent.

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A Positive For U.K. Banks
Jenkins, 51, has said that he expects "Project Transform," his plan to revamp the bank, to take five to 10 years and has told staff that they should leave if they do not want to sign up to the new standards.

He has cut the average bonus for investment bankers to 54,100 pounds for last year, down 17 percent on the year. It will pay 1.85 billion pounds in bonuses, down 14 percent.

Jenkins plans to focus investment in Britain, the United States and Africa, and reduce the bank's presence in continental Europe and Asia. Nearly one in three Barclays' branches in continental Europe, or over 340 offices, according to Reuters calculations, will be closed.

He will scale back the investment bank's equities and advisory businesses in continental Europe and Asia and refocus its retail businesses in Italy, Spain, Portugal and France on mass affluent customers.

Jenkins aims to cut the bank's cost base to 16.8 billion pounds in 2015, excluding one-off costs to achieve that of 2.7 billion over the next three years, and lift its dividend to achieve a 30 percent payout ratio.

"We take this as a positive for the UK banks -- the fact that a bank was allowed to increase its dividend in a backdrop where the Bank of England has been talking about capital holes in the UK banks," said Chira Barua, senior analyst at Sanford Bernstein.

More: American Express To Cut 5,400 Jobs

A Good Start To The Year
Barclays is still recovering from the political furor that followed its $450 million fine for manipulating benchmark interest rates in June. The ensuing storm triggered the departure of its then chief executive, former Wall Street trader Bob Diamond, and chairman Marcus Agius.

Its bill, meanwhile, to compensate customers for mis-sold products has hit 3.5 billion pounds and investigations are continuing into whether it correctly disclosed fundraisings from Middle East investors.

The Financial Services Authority and Serious Fraud Office are probing certain commercial arrangements between Barclays and Qatari investors related to two 2008 fundraisings.

Unveiling the strategic plan alongside annual results, the bank reported a 2012 pretax profit of 246 million pounds, down from 5.9 billion in 2011 due to the cost of compensating customers and losses on the value of its own debt.

However, the bank said its adjusted pretax profit for 2012 was 7.05 billion pounds, up 26 percent on the year and in line with the average forecast by analysts.

Pretax profit at the investment bank rose by 37 percent to 4.1 billion pounds, stronger than expected. Income in the investment bank was down 2 percent from the previous quarter, but up 13 percent on a year ago, with fixed income, equities and advisory arms all up.

The bank said it had a good January. "We've had a good start to the year, pretty much across the board and all businesses so we move into the rest of 2013 with confidence," Finance Director Chris Lucas told reporters on a conference call.

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Transformation means un-employment lines!!!!!

February 13 2013 at 11:52 AM Report abuse rate up rate down Reply
Forest Chump

Unfortunately, the wrong end of the job spectrum at Barclays is probably being cut... They should lay off some decision makers...

February 13 2013 at 6:59 AM Report abuse rate up rate down Reply

I noticed he (Jenkins) did not say if he was going to take a cut in salary or bonuses !

February 13 2013 at 3:42 AM Report abuse +1 rate up rate down Reply

... huge \"amount\" of jobs? I wonder what \"amount\"? Could it be, a gallon, a 55 gallon drum, a cubic yard? Maybe the author of this story, which is seen around the world, meant to say huge \'numbers\' of jobs. Your going to see more of these errors in the future as the english language continues to be diminished as textspeak grows exponentially. ........................ yes, I purposely used \"your\" instead of \"you\'re\".

February 13 2013 at 2:00 AM Report abuse rate up rate down Reply

Barcley's is only cutting 3700 jobs hell J.P. Morgan, Chase, Bank of Screw You America dump that many in a morning. Barcley has to get with the program now if the were dropping 37,000 people in one week that might be something to write about but hell just 3700 thats not even worth a farthing.

February 12 2013 at 11:56 PM Report abuse rate up rate down Reply

I still would like to see some of those folks doing the"perp walk". THAT would restore some public confidence in the banking industry.

February 12 2013 at 11:14 PM Report abuse +1 rate up rate down Reply

'Project Transform'. Is this the new buss words for "The CEO ran the company so poorly that they have to layoff 3700 employees?"

February 12 2013 at 7:05 PM Report abuse +1 rate up rate down Reply

Looks like the UK's socialist government isn't working out any better than our's.

February 12 2013 at 5:30 PM Report abuse -1 rate up rate down Reply
1 reply to crystalball2114's comment
Forest Chump

Or GWB's, either...

February 13 2013 at 6:59 AM Report abuse rate up rate down Reply

Dont let Barry know... in his fantasy world jobs (even in Europe) are recovering,,,,

February 12 2013 at 4:30 PM Report abuse rate up rate down Reply

"project transform" corporate double speak or "you're ******"!!!

February 12 2013 at 4:07 PM Report abuse rate up rate down Reply
1 reply to joseph0958's comment

Or Obamaspeak for "the economy is improving"

February 12 2013 at 5:30 PM Report abuse rate up rate down Reply

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