Barclays bank has announced plans to eliminate 900 jobs across its UK operations as part of a strategic initiative to streamline management and enhance shareholder value. The decision, which affects roles in IT, compliance, finance, legal, and risk departments, was communicated to employees today at 1pm. This move comes despite the bank posting a robust pre-tax profit of £1.9 billion for the recent quarter, as part of an industry-wide trend of downsizing to improve profitability.
Unite, the trade union, has strongly criticized the bank's timing for the job cuts, labeling the decision as "disgraceful" given the proximity to the holiday season and the bank's strong financial performance. Unite General Secretary Sharon Graham expressed disapproval of Barclays prioritizing profit over people, especially after the bank's significant earnings.
The job cuts are part of a broader effort by Barclays CEO CS 'Venkat' Venkatakrishnan to deliver higher returns through a more efficient organizational structure and the use of better technology. This approach is aligned with the banking sector's ongoing contraction, which has seen similar moves by other institutions, such as Lloyds (LON:LLOY) Bank, which is considering a reduction of approximately 2,500 jobs.
In addition to the layoffs, Barclays is reportedly in talks to acquire Metro Bank's £3 billion mortgage portfolio, following a series of job cuts earlier in the year and an additional 550 roles in September. The bank has pledged to support those impacted by the changes, although details of the support measures have not been disclosed.
Barclays' restructuring reflects the challenging environment for the banking industry, where traditional institutions are grappling with the need to adapt to technological advancements and changing consumer behaviors, often resulting in job losses and branch closures. As the sector continues to evolve, Barclays is focusing on refining its operations to remain competitive and profitable.
InvestingPro Insights
In light of Barclays' recent organizational changes, real-time data and insights from InvestingPro provide a deeper understanding of the bank's financial health and market position. Barclays has demonstrated a commitment to enhancing shareholder value, as evidenced by its three-year streak of dividend increases, a notable achievement for investors seeking consistent returns. Additionally, the bank is trading at a low Price/Book multiple and a low P/E ratio relative to near-term earnings growth, which could signal a potentially undervalued stock to savvy investors.
InvestingPro Data shows Barclays with a market capitalization of $26.81 billion and a P/E ratio of 4.04, underscoring its position as a prominent player in the Banks industry. The bank's revenue for the last twelve months as of Q3 2023 stood at $28.98 billion, with a slight revenue growth of 0.55%. Despite recent job cuts, analysts predict Barclays will remain profitable this year, already having been profitable over the last twelve months.
For those interested in a more comprehensive analysis, InvestingPro offers additional InvestingPro Tips for Barclays, which can be accessed by subscribers. Currently, InvestingPro subscription is available on a special Cyber Monday sale with a discount of up to 55%. Moreover, using the coupon code sfy23 will grant an additional 10% off a 2-year InvestingPro+ subscription. There are 8 more InvestingPro Tips available for Barclays, providing further insights into the company's financial metrics and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.