That Barclays simultaneously announced a huge profit hit while raising its bonus pool today ruffled investors’ feathers. But the bank’s planned 10,000 to 12,000 layoffs, also announced today, show that in some areas Barclays is joining the ranks of other big banks in axing employees and pay.
Nearly 20% of the British banking giant’s managing directors, or about 220 of the bank’s highest earners, are set to lose their jobs over the next 12 months. Like other banking chiefs, Barclays’s chief executive Anthony Jenkins seemed focused on slashing fixed costs amid declining profits. Banks like Barclays, Bank of America, Morgan Stanley and Goldman Sachs are turning to tech-heavy trading centers and data centers to cut personnel in banking and customer service businesses. ”There’s also a lot of strategic opportunity in the group, from the automation of our retail businesses for the customer, but also in the operation of our institutional businesses, particularly in the middle and back office,” Jenkins said on a call today with analysts to discuss the firm’s earnings.
The pain will reach the highest echelons of the bank. At Barclays, the role of managing director is the top rung a banker can reach. The title comes with a guaranteed annual base salary of between $400,000 and $500,000, not including bonuses and other compensation, according to recruiters familiar with the bank’s pay. Another 600 directors (just one rung below managing directors), who haul in between $250,000 and $300,000 in base salary, also are on the chopping block.
Cuts are hitting the elite ranks of other storied banks, too. Last month, some of Goldman’s elite partners, the highest executives at the banking, securities and investment management firm, took as much as a 30% cut to their bonuses amid a cost-cutting spree. Sources told Quartz that not all Goldman partners saw cuts in their bonuses; the pay cuts were in specific areas in which the bank performed poorly such as fixed-income trading, while the pay for some others was up to roughly flat from the year prior.