Barclays Capital is set to cut hundreds of jobs in its back office in an effort to cut costs, according to media reports.
Reports in The Times and the Financial Times said that hundreds of redundancies are expected to take place at the bank’s investment banking division from this week.
According to the FT, the cuts will be made in Barclays Capital’s back office and administrative functions, and could affect the division’s offices across the globe, including London.
The redundancies are expected to take place despite the Barclays group reporting a 44 percent increase in pre-tax profit to £3.95 billion last week, for the half-year ended June. Barclays Capital accounted for more than 80 percent of the group’s profits.
However, the reports say that the cuts are being made due to a significant fall in market activity in the second quarter.
Barclays Capital had not responded to a request for comment at the time of writing.
The number of employees in Barclays Capital has increased by 2,500 in the first half of this year, taking the division’s total to 25,500, with Bob Diamond at the helm. The investment banking division saw great growth two years ago when it expanded in the US by taking over the US business of Lehman Brothers, which collapsed in September 2008.
Meanwhile, in its results last week, Barclays' wealth management division said it was planning to accelerate its technology and people investment programme this year, after seeing a 27 percent increase in profits.
The news of several hundred redundancies in the private sector will be particularly damaging as a recent jobs report said that the public recession is also starting to bite. In addition, the Barclays news contrasts with another recent jobs survey, which said that the number of IT jobs in the financial services sector was on the rise as projects mothballed during the recession were being restarted.
Across Barclays, more than 2,400 back office jobs have been offshored, with 71 percent of operational sites closed in the last four years. The company has been extensively cutting IT staff. Last year it planned to cut 700 technology staff, reportedly offshoring work to Singapore, Hungary and India.