×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

BarCap cuts jobs, slowdown set to squeeze banks

BarCap cuts jobs, slowdown set to squeeze banks
Comment E-mail Print Share
First Published: Wed, Aug 11 2010. 03 24 PM IST
Updated: Wed, Aug 11 2010. 03 24 PM IST
London: Barclays Capital is to cut jobs across the world after a slowdown in activity, in a move bankers expect to be matched by rival investment banks if market conditions stay tough.
The unit of British lender Barclays Plc will cut about 400 back-office jobs in Asia, Europe and the United States, a person familiar with the matter said on Wednesday.
Financial market jitters on the back of Europe’s debt crisis have hurt income at trading desks, while client caution has depressed fee income from capital raisings, hurting overall investment banking income in the second quarter.
“It is inevitable as we move towards the end of the year, there are going to be redundancies across the board. Most of the big firms will have to trim at some point,” said Jonathan Evans, chairman of recruiter Sammons Associates.
BarCap’s revenues fell 15% in the second quarter from the first, and many rivals saw even steeper falls.
This will result in job cuts across the industry if there is no uptick in the third quarter, bank industry sources have told Reuters, as the dearth of deals forces banks to cut costs after an aggressive expansion drive.
A spokesman for BarCap confirmed it had begun a consultation with staff in some infrastructure functions “which will result in some job losses”. It will continue to hire selectively in parts of the business that are growing, he said.
BarCap has grown fast in the past two years, using its purchase of the US operations of Lehman Brothers to build an Asian and European equities and advisory business. It had 25,500 staff at end-June, up from 21,900 a year earlier.
“Some rationalisation of back office functions is entirely plausible.
However, we see no prospect whatsoever of a reversal of the strategic expansion,” Exane BNP Paribas said in a note, referring specifically to Barclays.
Barclays shares were 3% lower at 323.4 pence at 0958 GMT, making it one of the heaviest losers in the European banking index, which was 1.9% lower.
Comment E-mail Print Share
First Published: Wed, Aug 11 2010. 03 24 PM IST