Barclays bank’s stock is down 5% this morning after the bank posted dismal earnings and announced that it would cut 12,000 jobs, which is about 9% of its work force.
Overall, Barclays posted a $US1.05 billion loss for Q4 2013 (check out the announcement here). Its investment bank posted a $US539 million loss in over the same period.
And of course, like other major banks across the globe, Barclays has had to dole out major cash to pay legal penalties for a variety of transgressions — from manipulating the LIBOR interest rate to the $US2.4 billion the bank has put aside for small businesses that were sold complex financial products.
The bankers that survive these layoffs, it should be noted, will be paid higher bonuses, which has made some labour groups upset. The C-suite has argued, and continues to argue, that this is the only way to attract top talent. Over the last year, Barclays’ investment bank bonus pool is up 13%.
Barclays CEO Antony Jenkins, for his part, gave up his bonus for 2013, despite the fact that overall Barclays’ executive bonus pool is almost three times what the bank pays out in dividends, as one U.K. corporate governance expert complained to the Wall Street Journal.
“It cannot be right in any business for the executive bonus pool to be nearly three times bigger than the total dividend pay out to the company’s owners,” said Roger Barker, director of corporate governance at the Institution of Directors.
“In 2013, the bank paid out £859 million in dividends compared to a staff bonus pool of £2.38 billion. The question must be asked — for whom is this institution being run?”
This is all a part of the massive restructuring that the bank has undergone since the financial crisis. It’s selling loan portfolios and pulling out of retail banking, while at the same time meeting new regulatory capital requirements.
Most of the job cuts will be felt in the United Kingdom — about 7,000. Over 800 of the job cuts will be senior positions.