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News > International
Barclays to cut 6,000 jobs
May 20, 1999: 9:46 a.m. ET

U.K. bank slashing 10% of workforce as competition bites; $648M charge planned
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LONDON (CNNfn) - British banking group Barclays announced another round of job reductions Thursday with plans to cut more than 10 percent of its retail staff by the end of the year.
     The move is the latest attempt by the U.K.'s largest banks to cut their cost base to meet competition from telephone and online banking services as well as cross border banking rivals.
     Barclays, which has been beset by senior management problems, plans to lay off 6,000 staff from its 55,000 U.K. retail and 10,500 corporate banking workforce, leading to a restructuring charge of up to 400 million pounds ($648 million) in 1999.
     Chairman and acting Chief Executive Peter Middleton said the move will lead to annual savings of around 200 million pounds, with one-third of that generated this year.
     Barclays said the move was driven by changing customer preferences and technological advances. "The industry in the United Kingdom is going through a sea change," said John Varley, head of retail services at Barclays. "Technology is steadily reducing the number of people we employ in the industry."
     Barclays plans to make the cuts without closing any branches, as 85 percent of the jobs affected are back-office staff. Banks have met fierce resistance from unions and customers in trying to push through bank closures, according to John Reeve, financial services partner at Deloitte Touche Consulting.
     "Nobody really wants to go down this route and it is a case of who blinks first," said Reeve. He said banks have tended to lose customers after closing branches. "There is a cast-iron rationale for maintaining a significant number of full-service branches and staffed offices."
     Reeve said banks are of two minds about how far to go. Abbey National (ANL) came under fire this week after announcing a new set of charges for branch customers designed to move them to telephone-based services.
     At the other end of the scale, the largest and most profitable U.K. retail bank, Lloyds-TSB (LLOY), has opted to maintain most of the network acquired by its takeover of TSB.
     "You need some sort of footprint on the ground," said Reeve, pointing to video booths as a way to maintain brand awareness for cross-selling financial products while reaping the cost savings from branch closures.
     Barclays shares [LSE:BARC}climbed 3.6 percent to 18.80 pounds in afternoon trading.
     Barclays has been hit by a series of senior management problems and remains without a chief executive, while its investment banking arm has also suffered heavy losses in emerging market. Back to top
     -- from staff and wire reports

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.