Barclays to slash 12,000 jobs this year

Barclays, Britain’s third-largest bank, courted controversy on Tuesday after it announced plans to cut up to 12,000 jobs this year as part of an ongoing restructuring, even as it increased bonuses at its investment banking division by 10 per cent.

The majority of the cuts, around 7,000, will be made in the United Kingdom, and across banking divisions, though is yet to reveal the geographical breakdown.

Chief executive Antony Jenkins, who took over from Bob Diamond in 2012 following the Libor scandal and has not taken a bonus himself, defended the 10 per cent rise in bonus payments, which totalled £2.38 billion (₹24,300 crore), despite a drop in annual profits for 2013.

“To act in the best interests of our shareholders, we have to make sure we have the best people in the firm,” he told BBC Radio 4’s Today Programme on Tuesday morning.

The bank, which while not a recipient of a Government bailout at the height of the 2007 financial crisis, quickly drew criticism from politicians and unions.

“While many at Barclays are today celebrating their bonus bonanza, hard-pressed families still experiencing the financial pain of the recession — a recession caused in part by the reckless actions of the banks — will be struggling to make sense of it all,” said the General Secretary of the Trade Union Council, Frances O’Grady.

The opposition Labour Party said the bonus awards strengthened the party’s case for a tax on bonuses. But the bank also faced an unlikely critic — the Institute of Directors, an organisation representing business leaders in the UK. “It cannot be right in any business for the executive bonus pool to be nearly three times bigger than the total dividend payout to the company’s owners,” said the institute’s director of corporate governance, Roger Barker, pointing to the £859 million (₹8,800 crore) in dividends paid in 2013.

“Barclays needs to recognise that it starts in an extremely difficult place in the eyes of the public, given its ongoing stream of regulatory problems and infringements.”

The announcement by the British bank comes a day after a recently-created Banking Standards Review, tasked with building a new organisation to improve standards within the industry, published a consultation paper for the industry.