Barclays has been wielding the axe this week with its investment bank on the receiving end of a few hefty chops following the release of less than impressive profit figures. The shake up has left some analysts wondering if sections of the bank could end up being sold off.
The bank has revealed that in the first three months of the year its investment bank division saw profits fall by 50 per cent. The company’s chief executive Antony Jenkins has wasted no time in addressing the problem, which triggered a five per cent fall in Barclays’ share prices, by stating that as many as 450 managing directors could lost their jobs while in total it is estimated that 15,000 employees could receive the proverbial boot. This is far higher than the 10,000 jobs the company had originally said it would cut this year.
Jenkins has also stated that the bank will cut total compensation in the unit by 20 per cent to £1.1 billion after the outcry about the fact it increased bonus payments last year despite the fact that profits fell.
As a whole, profits in the first quarter dropped five per cent to £1.7 billion. However, the buck very much stopped with the investment bank division – the company’s only division not to show growth. Barclays has blamed “challenging trading conditions, in particular in rates and foreign exchange” for the failure.
Last week, the chief executive of Barclays America, Skip McGee, quit and there are reports that the head of mergers and acquisitions Paul Parker is set to leave. And while the African branch of the company said profits were up 25 per cent, the European retail banking arm, which is widely expected to be sold off or closed, continued to lose money.
Tomorrow the company will have a strategy review and people within the financial world and beyond will be waiting eagerly to hear the announcements that follow. 
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