On one hand, it's a great achievement that average income per head at BarCap was in positive territory at all for 2008. On the other, Barclays' annual results, which were published yesterday, show that income per head at BarCap plummeted to 150k last year, down from 410k in 2007.
Over the same period, BarCap's compensation costs as a percentage of net income soared. In 2007 they were 47%; last year they were 82%.
Does BarCap need to detach more staff to bring its costs into line? A total of 3,100 people were trimmed from Lehman's North American business in the fourth quarter last year, leaving a net addition of 6,900 people, but cuts elsewhere have been relatively modest. According to the annual report, 2008 headcount at legacy BarCap was -
...materially unchanged except for hiring associated with the annual global graduate programme.
Plummeting income and the soaring comp ratio suggest there's room for more cuts.
Promisingly, however, BarCap is echoing everywhere else in the assertion that 2009 has begun exceptionally well. BarCap staff need to hope this continues.