Barclays is cutting heads. Last month, the bank promised to get rid of 7,000 people from its investment bank in the next 24 months. This week, those cuts have reportedly begun.
You might think the extraction of nearly 30% of the investment bank's headcount would cause some upset within Barclays. Not at all. In an unnoticed Q&A session last week, Barclays' finance director Trushar Morzaria said that people at the bank are more energized and excited than they've been for a long time. It seems that the buzz is especially loud at Barclays' U.S. office: "Some of the town halls in the U.S. business in particular, have been absolutely unbelievable, less “what are you doing for me”, it's “what can I do to help execute strategy,” Morzaria enthused.
This might be because the new strategy at Barclays has the potential to benefit the U.S. business. Once the strategy has been executed, the newly refocused Barclays will coalesce around the old U.S.-based Lehman business, says Patrick Jenkins of the Financial Times. Accordingly, a high proportion of the 7,000 redundancies are expected to come from Barclays' fixed income currencies and commodities business, mostly located in the UK, while the equities and M&A businesses which form the nub of Barclays' activities in the U.S. should be mostly unaffected.
Even outside the U.S., Morzaria said people at Barclays are being "very mature" about the job cuts. In the front office it will all be, "relatively quick," he claimed. However, Morzaria admitted that the pain is likely to be more protracted in infrastructure teams, where people at Barclays appear to be a little less compliant. The infrastructure job cuts are, "a long-term proposition that we will close over time and to have that staffed and to control those as we wind it down is a little bit trickier," said Morzaria, opaquely.
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