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Barclays planning thousands more job cuts

Barclays PLC says it plans to cut up to 2,100 jobs in its retail and commercial banking units, adding to redundancies of the same size in its investment banking arms.
/ Source: The Associated Press

Barclays PLC will cut 2,100 jobs in its investment banking, fund management and private banking units in response to the global economic downturn, according to a person knowledgeable about the decision.

The cuts revealed Tuesday, representing about 7 percent of the bank’s global staff, are in line with layoffs by other major banking institutions in recent months.

“We have begun a process of reduction in head count across some parts of our investment banking and investment management businesses to ensure we are appropriately sized given the current market conditions,” said Simon Eaton, a spokesman for Barclays Wealth.

The person familiar with the plan — speaking on condition of anonymity because she was not authorized to talk on the record — said 1,300 layoffs will come from Barclays Capital, 500 from Barclays Wealth and 370 from Barclays Global Investors.

The global banking sector is shedding jobs at an accelerating rate because of the global credit squeeze. GMAC, HSBC, Commerzbank, Royal Bank of Scotland, Citigroup, Credit Suisse, Nomura, American Express and several other banks have cut tens of thousands of jobs between them since the start of September.

The London-based Centre for Economics and Business Research said 28,000 financial services jobs were lost in Britain last year and expects another 34,000 to be axed this year.

However, Eaton said Barclays “will continue to selectivity increase those parts of the business that are growing.”

The bank is building up its cash equities portfolio after buying the U.S. business of bankrupt Lehman Brothers last September.

Barclays, Britain’s fourth-largest bank, last year shunned a government bailout of the banking system that was used by rivals Royal Bank of Scotland Group PLC, Lloyds TSB Group PLC and HBOS PLC.

Those banks all agreed to cede major stakes to the government in return for a combined 37 billion pound ($55 billion) cash injection from the British Treasury.

Barclays turned instead to Middle Eastern investors, including the Qatari and Abu Dhabi royal families, to raise more than 5 billion pounds.

The market initially welcomed Barclays’ decision to remain independent of the government, but investor advisory groups have since questioned whether the government deal would have been better.