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Barclays to slash thousands of jobs amid profit dip

Barclays has announced that it will slash 19,000 jobs in the next three years, 7,000 from its investment banking alone. The restructuring comes amid a drop in profits and a wave of senior departures.

Britain's Barclays bank said Thursday it would axe 19,000 jobs over the next three years as part of a revival plan, a substantial increase from earlier estimates.

The bank also said it would slash 7,000 jobs from its investment bank by 2016 after a dip in revenues, a string of senior departures, and a controversy over bonuses. Barclays is furthermore setting up a "bad bank", where it will house 90 billion euros ($125.33 billion) worth of risk-weighted assets from the division.

"This is a bold simplification of Barclays," chief executive Antony Jenkins said. "We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage."

The plan means that the investment bank will comprise no more than 30 percent of Barclays' risk-weighted assets, down from the current 50 percent. It will provide more prominence to Barclays' retail operations in Britain, its Barclaycard credit card arm and its African business.

Costs incurred from restructuring

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The announcement came two days after Barclays said its first-quarter profits dipped 5 percent year-on-year to 1.69 billion pounds ($2.9 billion).

The restructuring will cost a further 800 million pounds. But by 2016 Barclays aims to raise its dividend pay-out ratio to up to 50 percent of adjusted earnings, compared to the current guidance of 40 percent, and will have heftier defenses against potential loan losses.

rs/hg (dpa, Reuters)

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