BarCap to cut 200 UK staff as revenues fall

BARCLAYS Capital will lay off two to three per cent of its workforce this week, with a third of the cuts to fall on its London offices.

In all, 600 front and back office staff will be given notice at the investment bank, with around 200 of those in the UK. The downsizing will include several managing directors as well as junior staff.

The bank had been expanding its equities business over the last couple of years, but the European division is now thought to have reached an appropriate size even as equities hiring will continue in Asia.

2010 was a difficult year for investment banks, with many primary market activities such as floats put off due to an uncertain economic climate.

BarCap’s most recent results, for the third quarter of last year, show revenues slowing quarter-on-quarter, despite being up overall on 2009. The division made a loss of £182m in the third quarter, a dramatic fall from pre-tax profits of £1.9bn in the previous quarter.

The job cuts this week will mark the end of a consultation period begun in December, a period mandated by UK law for any business that intends to cut more than 100 jobs.

Chief executive Bob Diamond is also conducting a separate review of the whole bank, including BarCap, the division he built and headed for 14 years.

There was speculation this week by analysts that Barclays might opt to spin off its worst assets into a “bad bank” as RBS did after the credit crunch.

The idea was mooted by Rich Ricci last year, currently the bank’s co-head of corporate and investment banking.