BUSINESS INSIDER, TRISTA KELLEY APRIL 24, 2019
Senior Barclays staff have been bracing for job cuts following the surprise departure of top executives in the investment bank in recent weeks. But Barclays says there are no plans for elimination of staff.
The internal fears come amid the revelation that the bank was at one stage planning a 20% compensation cut in its international unit, according to a letter sent to the CEO by former executive Tim Throsby.
Throsby, formerly the CEO of Barclays International, sent the email, titled "irreconcilable," criticizing planned cuts and what he considered unrealistic targets, Business Insider previously reported.
Barclays is planning bonus cuts to reduce costs and appease activist investor Edward Bramson, the Financial Times reported on Tuesday.
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Barclays says it won't cut staff amid fears of job losses and slashed bonuses after the surprise exits of key managers in the past few weeks.
Senior staff in Barclays investment bank have been bracing for job cuts after the shock departures, and amid the revelation that the bank at one stage — according to a letter to senior leaders from ousted exec Tim Throsby — was planning a 20% compensation cut in its international unit.
Staff at the managing director and director levels in the investment bank, shaken by the surprise exits of Tim Throsby, CEO of Barclays International, his deputy, and a string of other senior executives, have been discussing the specter of reductions in the investment bank, which some fear could come as soon as the end of the month, according to one insider at the bank.
But Simon Hailes, a spokesman for Barclays, told Business Insider that "there are no plans for job cuts." He declined to elaborate when asked for more specifics, such as scope and time frame.
Even if their jobs aren't at risk, their pay might be. The Financial Times reported on Tuesday that Barclays is taking aim at bonuses in a bid to reduce costs and appease activist investor Edward Bramson, whose Sherborne Investors wants to gut the investment bank and win a seat on the board at the Barclays general meeting on May 2.
The bank's plan to cut costs, versus the ambitious goals of CEO Jes Staley, were a sore point in the disagreements between the CEO and Throsby and may have hastened the latter's exit in late March.
Throsby had reportedly hired dozens of managing directors during his two-year tenure, while his international unit promoted 85 MDs at the start of the year. With Throsby's exit, many now see the writing on the wall, the Barclays insider said.
The Financial Times wrote on Tuesday:
"Britain's last remaining global investment bank is planning to cut bonuses as part of a cost-cutting drive to boost returns at the underperforming investment division, according to several people briefed on the plans.
"It's clear that costs are under pressure. Either you achieve it through pay cuts or you have to do redundancies," said one of the people.
The rate at which bankers accrue annual bonuses is set to be more closely tied to performance, with accrual in the first quarter expected to be down by double digits compared with last year."
Business Insider reported earlier this month that Throsby drafted an email to Staley, titled "irreconcilable," where Throsby pushed back at what he characterized as a plan for compensation and job cuts, as well as a reduction in capital reserves that buffer against potential losses, at the international division.
It isn't clear whether specific plans outlined in the email remain in effect, including the extent of the compensation reduction, and a new plan was voted on after Throsby's departure, sources said.
Throsby played a key role in the bank's battle against Bramson, who owns about 5.5% of the stock, making him the third biggest shareholder.
Staley has outlined a strategy to boost firmwide return on tangible equity to more than 9% — a figure Throsby seized on in the email, feeling that no investor realistically expected the firm to reach this year.