Shares in Barclays rose nearly 8% to 262.5p yesterday after the bank said it was cutting 7,000 more jobs in its investment banking arm.
It brings to 19,000 the number of jobs across the group that will go by 2016, following an announcement earlier this year. It is estimated that up to about half of these jobs will be in the UK, some of them in branches.
The latest job cull effectively banished the ghost of former boss Bob Diamond, who built up the investment banking division and went on to become group chief executive amid rising public fury over high pay and huge bonuses.
Barclays said the number of £1million-plus bankers would fall as it focused on shrinking the investment unit to no more than 30% of the group’s overall business by 2016, with personal and corporate banking growing to become a “powerhouse”.
Mr Diamond resigned as CEO in 2012 in the wake of the scandal over traders who tried to rig the interbank lending rate, Libor.
His ambition to make Barclays Capital the “premier global investment bank” saw it expand to an extent where it still represents more than half of the group.
Current boss Antony Jenkins declined to endorse this goal yesterday as he announced the latest changes.
He said: “Our ambition is to be a focused international bank, and that applies to the investment bank as much as any other part of Barclays.
“Clearly with a smaller investment bank, our expectation is that the number of highly paid people in Barclays, defined as over £1million, will come down over time.”
Last month, Barclays was given a bloody nose at its annual general meeting after the staff bonus pool rose 10% to £2.38billion despite a fall in annual profits.
Staff numbers of about 26,200 at the investment banking arm at the end of 2013, including about 10,000 in the UK, will have fallen by more than a third – or about 10,000 – by 2016. The restructuring will also see £90billion of assets from the division hived off into a non-core unit – a “bad bank” – which will house this and other businesses that Barclays now says it wants to sell off or run down.
Mr Jenkins said: “This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage.”