British banking giant Barclays may reportedly cull 7,500 jobs or nearly 30% of its staff at its investment bank as part of a strategic review to boost returns at its securities unit, according to a report by Sanford C. Bernstein.
Majority of the job cuts would include around 5,000 of the roles at its European fixed-income, currency and commodity business or FICC, says the report.
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The report also revealed that 6,500 to 7,500 job cuts will account for about 25-30% of the unit’s employees.
Barclays is expected to eliminate managing directors initially, followed by more junior positions, reported Bernstein analyst Chirantan Barua.
Barua added that these job cuts will save about £1bn in annual costs, reduce compensation to about 33% of income by 2016, as well as see the business deliver a return on equity of 10-12%.
Barclays CEO Antony Jenkins said that the move comes as part of the bank’s strategic review, which is due to be published on 8 May 2014, to cut costs and improve returns.
Barclays is looking to cut jobs at investment banking unit as investors seek to lower compensation at the unit and minimise losses at the FICC unit.
Meantime, Jenkins added that he is planning to limit pay at the investment bank as part of changes after Libor rigging allegations.
Bloomberg quoted Barua saying: "The loss of income in FICC in the past nine months is probably the best thing that could have happened to strategic investors locked in Barclays."
