Barclays Lays Off 5% - 10% Of U.S. Staff Right Before Bonuses

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Barclays cut between 5% and 10% of its capital markets, advisory and other investment banking units in the U.S. yesterday, just days before bonuses are scheduled to be announced, a source within the bank told eFC.

The cuts ran the gamut in terms of seniority, affecting first-year associates through director level. The source had no knowledge of anyone on the managing director level being cut.

Barclays declined to comment.

In an unusual and somewhat brutal move, the eliminations included first-year investment bankers, said the source. Normally graduates who join Barclays in investment banking keep their jobs for a minimum of two years to "assess whether they like the job and perform before they are considered to be put under the chopping block," the source said. "Now banks evaluate people as soon as they walk in the door."

The cuts come just before bonuses are due to be announced on Friday, according to a source in the bank, and those laid off won't be eligible to be paid bonuses. That will save Barclays millions of dollars.

"If there is a fully discretionary provision, there is really no recourse for the employee," said Joanne Seltzer, a partner in the New York City office of Jackson Lewis LLP. Seltzer wasn't specifically commenting on Barclays cuts.

As is the practice at many banks governed by U.S. employment laws, Barclays made its job cuts with efficiency. "They call your desk, you go to your manager's office, he says you're being let go. You can't talk to anyone, and they tell you that if everything doesn't go to plan, security is standing by," the source said.

"It's like an execution."

The firm will also lay off an additional 275 investment banking employees in May as part of its strategic review, according to Bloomberg Businessweek. This week's cuts were based on performance; the May cuts will be layoffs, the source said.

http://sg.finance.yahoo.com/news/barcap-cuts-10-u-...

Pretty dick move to do it right before bonuses. They should at least be entitled to a portion.

Comments (20)

Feb 6, 2013

The people I know at Barclays say that morale is in the toilet. That was before the layoffs. From what I understand the firings right before 'bonuses' wasn't as big of a deal as you would expect because people weren't expecting much and most didn't plan on staying through the vesting anyway.

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Feb 6, 2013

Who would want to work at barclays anyway.

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Feb 6, 2013

Does anybody know if there's serious pressure on CS now with UBS and Barclays in the shitter?

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Feb 6, 2013

When something like this happens, are bonuses accrued or completely discretionary? I never worked at a BB so am curious. I assume discretionary or more so for junior level positions.

Feb 6, 2013

They also had a big round of layoffs in 2011 at the end of the summer if I recall

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Feb 6, 2013

Lol @ someone from Barclays dropping monkey shit on everyone here

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Feb 6, 2013

Do banks that do like like UBS and Barclays think it won't hurt their reputation?

Float like a butterfly, sting like the bee.

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Feb 7, 2013
TheBlueCheese:

Do banks that do like like UBS and Barclays think it won't hurt their reputation?

I don't think that layoffs are really going to harm their reputation at this point. Just spend 5 minutes Googling Barclays and look at all the gems you get:

http://www.guardian.co.uk/business/2013/feb/06/lib...

http://www.foxnews.com/world/2013/02/05/barclays-p...

http://www.dailymail.co.uk/news/article-2265253/An...Barclays--boss-lied-shredded-evidence.html

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Feb 7, 2013

Don't they have certain contracts that state employees will receive severance in light of layoffs or has it become typical for banks to do this before bonuses are out.

Feb 8, 2013

Still some good things happening in pockets of the IB - but downward pressure on comp and resources will leave B and C players staying on - A players will exit.

Feb 8, 2013

I thought layoffs in Asia and Europe were already finished, and mostly senior guys got laid off. Nobody knows what will transpire next Tuesday, but I bet the conversion rate won't be affected.

Feb 8, 2013

Ahhh i see. Thank you for your insight.

Feb 8, 2013

I just heard the news that Barclays will reposition their Asia IBD operations... Does that change things????

Feb 8, 2013

Maybe, but you're better off being in the IBD. I'm not sure how empty the trading floor is right now.
You just need to do well this summer to get a return offer unless you have alternative plans.

"We believe that Asia and Europe offer significant opportunities to our global client franchise and
remain a vital part of making our Equities and IBD platforms effective and efficient.

However, we now anticipate smaller regional fee pools in Asia and Europe and will reposition
our franchises there to fit the market opportunities. We have already reduced front office
headcount by 15% in these regions.

We are also already reducing headcount across other areas of the Investment Bank, not just
Asia and Europe, with a 1,600 headcount reduction in 2013.

We expect these actions to ultimately generate, in aggregate, PS300m of annual cost savings."

Feb 8, 2013

WSJ says 7000 cuts will be in Britain, and the other 5000 will be spread across its other global offices.

Feb 8, 2013

Not just Barclays, DB as well

Feb 8, 2013

Pretty much all European banks

Feb 8, 2013
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