Morning Coffee: Barclays' sudden emergence as one of biggest job cutters. Pay squeeze at Jefferies
Everyone knew that Barclays had been cutting a few jobs. Last year, there were reports of cuts there in trading, cuts in the back office, cuts in leveraged finance and technology and cuts to M&A juniors Something was clearly afoot.
But like Bank of America, it transpires that more was happening at Barclays than anyone knew, and that the reports of peripheral headcount reductions concealed far greater cutting beneath the surface. In fact, Sky News is reporting that Barclays cut headcount by 5,000 people last year.
This is nearly 6% of the 84,000 people Barclays employed at the end of 2022. It puts the bank in the top tier of headcount cutters for 2023. The Financial Times reported at Christmas that banks cut a combined 60,000 jobs in 2023. The FT said UBS/Credit Suisse cut the most (13,000 people), followed Wells Fargo (12,000) and Citi (circa 5,000). Barclays is a late contender for joint third place.
As at Bank of America, not all the cuts were the result of active cutting; failing to fill empty roles also played a part in reducing headcount numbers. Barclays implemented a hiring freeze from May.
Many of Barclays' cuts so far at the bank seem to have come in the back office. Bloomberg says they were mostly in the 'support functions, reflecting the removal of management layers and improved technology and automation capabilities.' However, Barclays is expected to announce its 'Project Minerva' restructuring initiative in February, and the fear is that this could lead to cuts in front office areas like leveraged finance.
Separately, Jefferies announced its fourth quarter results yesterday and they suggest the bonus round there may not have been pretty.
Despite ending 2023 with 70 additional managing directors and increasing overall core headcount by 280 people (or over 2,000 people when the addition of an FX brokerage firm which didn't repay a Jefferies loan is factored in), Jefferies' marginally cut spending on compensation last year, suggesting someone there was squeezed. Existing/underperforming managing directors seem the most likely victims. Jefferies may even have been generous in the circumstances: earnings were down 53% on the previous year.
Barclays is top of the UK M&A league table for the first time in six years. (Financial News)
Bad loans at the top four US banks - JPMorgan Chase, Bank of America, Wells Fargo and Citigroup - are expected to have risen to a combined $24.4bn in the last three months of 2023. This is up $6bn on 2022 but below the $30bn of the pandemic. (Financial Times)
Bank of America took a $1.6 billion charge from the shift away from LIBOR. It says it will need to make this up as income. (Bloomberg)
Lee Merchant, the head of spot trading at Deutsche Bank, has left after 30 years. (FX-Markets)
Zakria Hussain has left Crédit Agricole, where he was most recently global head of eFX spot trading, to join Nomura Group’s digital assets subsidiary Laser Digital as head of OTC trading. (Trade News)
How is it that Bill Ackman has so much time to spent on vengeful Twitter campaigns? “ ‘What about your day job?’ they say. And my answer is, my big posts are at night, on weekends, or on vacation like last week...The good news is my business interests and my patriotic interests are perfectly aligned.” (WSJ)
Bill Ackman or American psycho? (FT Alphaville)
Only 700 new IT jobs were created in the US last year. "Currently, there are almost 100K unfilled jobs with over 101K unemployed IT Pros – a skills mismatch." (The Register)
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