Barclays to cut 12,000 jobs as bonuses rise but profits fall

Job losses announced as Barclays reveals disappointing pre-tax profits of £5.2bn in 2013

LAST UPDATED AT 11:41 ON Tue 11 Feb 2014

BARCLAYS has announced 12,000 redundancies as it battles to cut costs after a sharp fall in profits at the end of last year. 

The news came hours after the bank revealed that it had increased bonuses paid to staff last year. The total bonus pool for 2013 was £2.38bn, a rise of ten per cent from 2012.

"At Barclays, we believe in paying for performance and paying competitively," said Antony Jenkins, the bank's chief executive. Jenkins has chosen not to take his own annual bonus for the past two years.

The BBC reports that the job losses will affect 820 senior managers, including 220 managing directors. About 400 senior jobs will be shed from the investment banking division. Barclays, which cut 7,650 jobs last year, said it hoped that most redundancies would be voluntary.

The Financial Times said that Jenkins was "forced onto the defensive" by the increase in bonuses at a time when "the investment bank slid into the red in the fourth quarter, dragging its attributable profits down 42 per cent for the full year".

The paper added: "Jenkins is under pressure to act on costs, with Barclays' cost to income ratio relatively high among its peers at about 70 per cent. But overall operating expenses in the fourth quarter were £5.75bn, sharply higher than the £4.7bn reported in the same quarter last year."

Barclays had earlier announced a fall in adjusted pre-tax profits to £5.2bn in 2013, attributing the reduction to restructuring costs, withdrawal from some areas of business and legal costs. The bank's statutory pre-tax profits for 2013 were £2.9bn. · 

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