Barclays mulls wielding axe at investment bank, while Rolls-Royce plans to cut 378 jobs at factory near Coventry
Two of the UK’s highest profile employers, Barclays bank and Rolls-Royce, have signalled that hundreds of jobs are on the line after launching formal consultations on cost-cutting.
All 9,000 staff in the investment banking arm of Barclays received an email informing them that a consultation had begun, which could lead to redundancies, as part of an on-going review instigated by the group’s new chief executive Antony Jenkins. Rolls-Royce, one of the UK’s biggest manufacturing names, also announced plans to cut 378 jobs at an aircraft and marine engine plant in Ansty, near Coventry.
Rumours swirled around Barclays at the end of last year that just under one in 10 of the investment bank’s 23,000 global workforce would be axed in a strategic overhaul. Jenkins ordered the shake-up after he took the helm in September following the departure of Bob Diamond in the wake of the £290m Libor rigging fine.
According to officials at the Unite trade union, Rolls-Royce has begun consultation on cutting 378 jobs related to defence work at Ansty, where the industrial group refits and repairs engines. “The blame for the loss of these highly skilled jobs in the key defence sector lies with the government and its short-sighted determination to ram through massive spending cuts in the defence budget,” said Ian Waddell, Unite’s national officer.
At the rest of Barclays – which employs 140,000 people in areas including retail banking and wealth management – could face similar warnings to the investment bankers as the deadline for Jenkins’s review approaches on 12 February.
The email to staff in the investment bank – known until last year as Barclays Capital – did not specify how long the consultation would last or how many jobs were likely to be targeted. Up to 99 roles can be cut after a 30-day consultation, then 100 or more if the consultation lasts 90 days.
Analysts at Morgan Stanley regard Jenkins’s plans for the investment bank as “key” to the future of the bank. However, they said: “We do not expect radical reshaping of the investment bank, but anticipate details on the restructuring of the legacy and subscale business areas, where we see potential to release £9bn of capital.” They forecast the “compensation cost” per employee in the investment bank to be flat at £200,000.
Rich Ricci, head of the investment bank who has waived his 2012 bonus because of the Libor scandal, has already indicated that his own review – code-named Mango – had involved a review of the tax avoidance “structured capital markets” business and food speculation.
Ricci’s review, which is understood to have already been fed into Jenkins’s so-called “Transform” programme, looked at 54 business units in total and particularly at areas which generated “negative media and political attention”.
A spokesman for Barclays investment bank said consultation with UK-based employees was “being carried out so that we can start to effect some of the strategic changes as a consequence of the Transform review of Barclays business”.
Investment bankers were sent the emails less than a week after Jenkins told staff they should leave if they did want to “uphold” his values – respect, integrity, service, excellence and stewardship.
Job cuts are already under way at other investment banks, notably UBS where up to 3,000 jobs in London are expected to be lost. On the day the Swiss bank announced its job cuts in October some 100 or staff were told they were being put on “special leave” and led into a side room rather than being allowed in their offices. The job cuts at UBS continued this week with the departure of Alastair Ryan, co-head of European banking research.