More cuts coming to Barclays in the U.S. as retail bankers complain they're being unfairly targeted
Last week’s departure of Shane Holdaway, former chief executive of Barclays U.S. consumer bank, isn’t the only news coming out of the British lender concerning its retail operations. Barclays plans to cut or relocate dozens of jobs from its consumer banking base in Wilmington, Delaware and has significantly reduced its marketing activities for direct-to-consumer retail products, according to sources close to the bank.
Barclays will continue to invest in its 22 co-branded credit cards that have been a core part of its U.S. retail business for more than a decade but is pulling back resources from its direct-to-consumer retail products, including Barclays own credit cards. The bank plans to allocate those funds to other parts of its U.S. retail business. Barclays told the FT late last year that it is creating checking accounts for its online U.S. bank, putting it in direct competition with Goldman Sachs’ Marcus business, and would look to incorporate retail banking technology that is the norm in the U.K. but is still largely absent in the U.S.
One anonymous employee suggested that colleagues are upset that Barclays seems to be deemphasizing its strong credit card business. “It has continued to show growth and strong performance,” the employee said. “[CEO] Jes [Staley] seems to focus on growing and investing in the investment bank” instead. However, sources close to the bank said the moves have no correlation with the investment banking side of the business.
Meanwhile, the strategic changes will coincide with significant job cuts in Delaware, with one anonymous employee predicting that as many as two hundred jobs could be at stake over the next six months, though many of those positions will be relocated to its new campus in Whippany, NJ as well as offices in Henderson, NV and overseas in India, sources said. Barclays has recently made major investments in Whippany and Glasgow, Scotland as hubs for technology and operations, including retail.
“Co-locating some of our operations, technology, and functional teams doing similar work enables us to be more agile and innovative in serving our clients and customers, and ultimately our shareholders,” Barclays said in a statement to eFC. “As we have shared with colleagues previously, additional relocations and hiring will continue as the [Whippany] campus transformation progresses…Wilmington remains a strategic and important home for our organization.” A source said an announcement about strategic changes and headcount adjustments could be made as soon as next week. Barclays declined to comment on any potential announcement but said “updates will be communicated when appropriate.”
Staley noted during the bank’s latest earnings call that the bank’s cost to income ratio was 62%, “a modest improvement over last year” but the bank will continue to target a ratio of 60% or better over time.
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