Barclays to Slash 275 Jobs in NYC
Barclays Investment Bank – a division of Barclays PLC (BCS) – is set to eliminate nearly 275 jobs in New York City. These layoffs are a part of the company’s strategic overhaul aimed at reviving its profitability.
Barclays had disclosed its plans to retrench employees in a filing with the New York State Department of Labor. The company is liable to give a notice period to the employees under The Worker Adjustment and Retraining Notification Act (WARN Act). Under this Act, it is necessary for most employers – with 100 or more employees – to provide an advance notification of 60-calender day to the employees, before the closure of the plant and mass layoffs.
The layoffs will take place during a 14-day period beginning on May 15, 2013. The company held the economic factors responsible for the layoffs. The reduction in headcount will occur at the company's 3 offices in the New York City – 200 Park Avenue, 745 Seventh Avenue and 130 Avenue of the Americas.
Over the past year, Barclays has been under tremendous pressure owing to unsettling macro economic factors. In addition, the company is embroiled in various controversies highlighting its scandalous activities. Earlier this week, the company set aside additional £1.0 billion ($1.6 billion) to meet litigation expenditures pertaining to the dubious sale of financial products.
Further, in 2012, Barclays reached a $453 million settlement with both British and U.S. regulatory bodies over the manipulation of the London Interbank Offered Rate or LIBOR. Similar to Barclays, another European bank, UBS AG (UBS) has been ordered to pay a penalty of CHF 1.4 billion ($1.5 billion) to the U.S., UK and Swiss authorities to resolve charges against the bank for its involvement in LIBOR rigging.
Barclays’ financials are battered by innumerable problems, prompting its management to undertake revamping efforts. The company is likely to announce restructuring initiatives along with its fourth-quarter earnings on Feb 12. It is probable that the company could retrench around 2,000 employees in total.
In addition, Barclays is anticipated to slash bonuses for investment bankers for 2012 by roughly 20%. The CEO of the company has let go off his bonus for the past one year. Similar to Barclays, Citigroup Inc. (C) and Morgan Stanley (MS) have also slashed bonuses and retrenched employees.
The Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Barclays is 0.00%. This, coupled with its Zacks Rank #4 (Sell), indicates that the company may miss the Zacks Consensus Estimate for the fourth quarter.
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