Barclays Bold Move: £1 Billion Savings and Job Cuts in Overhaul Bid

Barclays Bold Move: Barclays, led by CEO C.S. Venkatakrishnan, colloquially known as Venkat, is reportedly delving into plans to streamline its operations and achieve significant cost savings, with a targeted goal of up to £1 billion. Sources suggest that this overhaul could potentially entail cutting around 1,500 to 2,000 jobs, primarily concentrated in the bank’s back-office functions. The initiative aims to bolster Barclays’ profitability amid challenges in its book value and intensifying competition in the financial sector.

While the specific details of the proposed job cuts remain under wraps, it’s suggested that Barclays Execution Services (BX), the internal moniker for the back-office unit, could witness a substantial reduction in its workforce. The envisioned savings are part of a broader strategy to curtail expenses across the entire group over the coming years.

BX, established in 2017 to consolidate support functions for Barclays’ primary business divisions, has seen its headcount and costs escalate in recent years. As of the end of 2022, BX’s staffing stood at around 22,300, up from 20,000 at the close of 2017, constituting over 25% of the entire Barclays workforce. Annual staff costs at BX have concurrently risen to £2 billion from £1.8 billion.

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The looming decision on potential job cuts is integral to Venkat’s efforts to uplift Barclays’ declining book value, a concern that has been exacerbated by a recent trading blunder costing the bank substantial amounts. Additionally, Barclays faces the uphill task of retaining talent within its investment bank, where a talent drain has hindered its competitiveness against European counterparts.

Barclays, under Venkat’s leadership, has witnessed a 26% decline in its share price since November 1, 2021, adding pressure on the CEO to unveil a compelling strategy during an investor presentation in February. The bank is currently working with Boston Consulting Group on a comprehensive strategy review, examining which business segments to invest in and which to scale back or divest.

As the financial giant contemplates significant structural changes to navigate industry challenges, the forthcoming strategy presentation is anticipated to be a pivotal moment for Barclays to assuage shareholder concerns and outline a clear path for its future trajectory.