Pay cuts, job losses loom for Barclays staff

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Barclays plans to cut the pay of the 24,000 employees at its investment banking unit by as much as 30 per cent, sources say.

The British lender is preparing to tell employees at Barclays Capital next week that overall pay will be down by 25 per cent to 30 per cent from a year earlier, two people with knowledge of the plan said.

They declined to be identified because the move has not been made public.

The bank will also eliminate about 5 per cent of its senior bankers, said the people. Most of those at risk hold titles such as executive directors and managing directors.

The world's biggest lenders are cutting pay as they grapple with declining revenue. Morgan Stanley, Credit Suisse and Citigroup reduced senior investment bankers' pay for last year.

Deutsche Bank, Germany's largest, yesterday said it cut pay for employees at its corporate and investment bank by 15 per cent.

Barclays also plans to cut wages for more junior employees such as vice-presidents, associates and analysts, the people said.

The London-based bank plans to reduce pay for third-year vice-presidents, which can be as much as US$750,000 ($902,000) a year, by about US$100,000, the people said.

The reduction will trigger similar pay cuts for more junior vice-presidents, associates and analysts.

In past years, base pay for junior bankers, who usually comprise three-fourths of a Wall St firm's employees, would rise by 15 per cent to 20 per cent annually, even in lean years, the people said.

Barclays reports full-year earnings on Friday. Its net income may fall 12 per cent to £3.14 billion from £3.56 billion, according to the median estimate of 11 analysts surveyed by Bloomberg.

Investment banking revenue fell 12 per cent to £2.25 billion in the third quarter, the lender said in October. It said at the time it had eliminated 3500 jobs in 2011.

Banks, insurers and asset managers in Britain may eliminate 11,000 jobs in the first three months of this year after cutting 9000 jobs in the fourth quarter, says the Confederation of British Industry, Britain's biggest business lobby group.

Financial firms in Britain may have shed almost a tenth of their employees by the end of the first quarter since Lehman Brothers Holdings's collapse, the CBI said.

- Bloomberg