Barclays
Plc is to be the next investment banking giant to decide to cut jobs in its
ranks, according to Bloomberg, citing people familiar with the matter
who wish to remain anonymous. Previously, UBS, Credit Suisse, and Goldman Sachs
decided to make a similar move.
Barclays Cuts Employment
by Another 100 Jobs
According
to the latest reports, Barclays is poised to say goodbye to a hundred employees
in its investment banking group, following a significant slowdown in the
industry that has already forced a sizable portion of its competitors to cut
jobs.
The first
interviews with employees who will be affected by the reductions are expected
to begin this week, Bloomberg reports. However, these are not the first
cuts in the division. In November 2022, the workforce was cut by 200 people or
about 3% of Barclays’ global investment division workforce. At the end of last
year, the bank employed about 90,000 people.
Among the
reasons behind the job cuts are deteriorating financial results. According to a
report for the last quarter of 2022, investment banking fees shrank by more
than 50% in one year, falling to $594 million.
Barclay’s Competitors Hit
by More Severe Cuts
Looking at
what’s been going on in the industry, even before the onset of the banking
crisis that nearly led to the collapse of Switzerland’s Credit Suisse,
Barclays’ cuts are modest, to say the least.
Struggling
Credit Suisse reported in January that it wanted to reduce its workforce by 9,000 jobs. In contrast, after its acquisition by rival UBS, it was
reported that the two institutions would reduce their workforce by a total of
36,000 positions after the merger.
Meanwhile,
Goldman Sachs reported that it was preparing to lay off 3,200 people due to
deteriorating economic conditions. Although, a few months earlier it had
suggested that the cuts could be even more severe, affecting 8% of the total
team, or about 4,000 positions.
More modest
cuts have been decided by JP Morgan, which wants to reduce 30 positions in
investment banking, focusing mainly on junior-level posts. Although the
headcount reduction affects less than 5% of all investment banking employees in
the region, it is still one of the largest in recent years.
Massive Layoffs in
Technology Sector
Bloomberg’s data indicates that the loss of
jobs in several vital sectors has affected almost 538,000 individuals since
October 2022. The start of the year saw the worst weekly decline of 52,000
positions in 14 years, which was reminiscent of the financial crisis’s negative
impacts.
Out of the
overall job losses, the technology sector experienced 172,000 cuts, followed by
the consumer discretionary sector with 110,000 cuts, while the financial
industry came in third, with 81,000 professionals being let go.
Notably, 20
companies accounted for 240,000 of the positions affected, with UBS leading the
list of companies announcing the most significant cuts. In recent months, job
reductions have been observed in major tech companies, such as Amazon, Alphabet,
Meta, and Microsoft.
Tech and
finance intersect in crypto, where significant job losses have been seen lately
due to market discounts. Luno cut 35% of staff, Gemini had a third round of job
cuts, and ConsenSys and Coinbase also reduced their headcounts. However, Binance aims to add 30% more full-time staff in 2023.
This article was written by Damian Chmiel at www.financemagnates.com.
