Barclays Share Price Edged Higher on Plans To Slash 2,000 Jobs

The Barclays PLC (LON: BARC) share price edged 0.83% higher after news broke that the British multinational bank was actively working on strategies to achieve substantial cost savings of up to £1 billion ($1.25 billion). 

The cost-cutting initiatives may involve a reduction of as many as 2,000 jobs, with the main focus being streamlining operations within the British bank's back-office functions. The exclusive report by Reuters was based on information from a reliable source with direct knowledge of the proposals.

Barclays' management team, led by Chief Executive C.S. Venkatakrishnan, is evaluating various proposals designed to enhance the bank's overall profitability. As part of these proposals, it is envisaged that 1,500 to 2,000 jobs could be eliminated if the plans are executed fully. 

The potential workforce reductions would primarily impact Barclays Execution Services, internally referred to as ‘BX'. According to the source, these cuts are expected to be a part of the broader objective of reducing expenses by as much as £1 billion across the entire Barclays Group over several years.

Financial analysts have noted that the scale of these potential cost savings could serve as a reassuring signal to investors. 

Barclays has made previous efforts to control expenses in recent years by implementing measures such as reducing bonuses and eliminating jobs in its retail and investment banking divisions. However, the move to scale down BX and achieve substantial savings is a new development that has yet to be reported.

BX was established in 2017 to consolidate support functions for Barclays' two primary business divisions, UK retail banking and international operations. Its primary goal was to eliminate redundancy and implement post-crisis risk management regulations.

Barclays' target of £1 billion in cost savings represents approximately 7% of the bank's underlying annual operating expenses, estimated at 15 billion pounds in 2022. It's worth noting that discussions regarding BX's staffing are ongoing, and Barclays may opt to prioritise layoffs in other areas, depending on the final decisions made.

BX has experienced significant growth in staffing and costs in recent years. Its headcount increased to around 22,300 by the end of 2022, up from 20,000 at the close of 2017. 

Barclays share price. 

The Barclays share price rose 0.83% to trade at 141.410p from Thursday’s closing price of 140.250p.