Barclays may begin handing out pink slips this week to some U.S. staffers in its investment banking division in an accelerated fashion meant to avoid the drawn-out process that characterized past job cutting, a person close to the situation said.
Last year, people earmarked to be laid off first went through performance reviews, then were told they would get no bonuses and were ultimately let go, said one source at the bank. It was a month-long process, said the employee. This year, the layoffs in the U.S. will happen before performance reviews and bonus discussions. The employee said the accelerated cuts will likely happen globally.
Barclays’ U.S. division declined comment.
The British bank acknowledged that it has begun the consultation process to lay off employees in the U.K. “This exercise is being carried out so that we can start to effect some of the strategic changes” that the company is due to announce on the Feb. 12, Barclays said in a statement.
In the U.S., Barclays “did a terrible job of layoffs last year, which really hurt our recruiting efforts and the overall impression about the strength of firm,” said the employee, who asked not to be named. This time around, people will be let go before any compensation conversations occur to eliminate the feel of having “dead men walking,” said the employee.
Earlier today Sky News reported that employees within its London investment bank were notified that their jobs are at risk.
In December, The Wall Street Journal reported that Barclays would look to cut roughly 2,000 jobs within its investment banking division, with the layoffs concentrated in Asia and continental Europe.
While the majority of the cuts will affect Asia and continental Europe, expect to see smaller, but still significant, layoffs in the U.S. and the U.K.
Joanne Seltzer, a partner in the New York City office of Jackson Lewis LLP, said that, depending on specific contractual language, employees are only eligible for discretionary bonuses if they are actively employed at the time of the bonus payment. “If there is a fully discretionary provision, there is really no recourse for the employee,” Seltzer said. Seltzer wasn’t specifically commenting on Barclays cuts.