If you want to work for Barclays, then Tom King is the person to know. An M&A banker by trade, King was promoted to become chief executive of Barclays' investment bank in May 2014. Since then, he's been presiding over a restructuring of the business in which 7,000 jobs are due to be cut by 2016. In July, Barclays said it had cut 800 jobs in the front office. During a presentation at the Barclays Financial Services Conference yesterday, King said Barclays has now cut 2,700 jobs in total - suggesting Barclays staff are being removed at the rate of 900 per month.
At least one category of Barclays investment banker is likely to escape the purge, however: equity capital markets (ECM) bankers are safe.
Why? Tom King loves ECM bankers.
Why does Tom King love ECM bankers? Because, he says they're a brilliant example of Barclays' new passion for, 'integrated origination verticals where businesses work synergistically together.'
What are 'integrated origination verticals...'? This is what King had to say on the subject:
"An initial public offering (IPO) within the equity vertical is the perfect origination example, because it cuts across the entire firm. You do an IPO, it touches coverage bankers, ECM bankers, syndicate, sales, trading, research, It [an IPO] touches a lot of people but it doesn't use a lot of capital and it actually creates franchise value. You do an IPO and you're in a position to get the secondary blocks, you're in a position to be active in secondary trading, if you're in the UK you're going to be the corporate broker, and hopefully you're in the boardroom so you're positioned for the M&A business that will get you a credential to do the next IPO. It creates real, ongoing, franchise value."
In King's estimation, people working on IPOs are the antithesis of rates traders. Rates traders use a lot of capital and don't create much business further down the line. Rates traders are therefore bad.
King said Barclays has been hiring lots of new integrated investment banking synergistic types. So far this year, Barclays has hired 13 managing directors into its IBD (capital markets and M&A) business. This seems to run contrary to Barclays' earlier promise not to hire any new MDs in 2014, but King explained that senior hiring is only permissible because, "we are being very aggressive with the overall cost picture." In other words, Barclays' credit traders are being dumped and investment bankers are being hired in their places. Barclays is turning into UBS.