Barclays bank to axe 1,000 jobs

26th January 2011, Comments 0 comments

British bank Barclays on Wednesday announced plans to axe 1,000 jobs and close its financial planning services unit, while the firm's investment banking division was hit with a £1.12-million-pound fine.

The company said in a statement that it has entered into talks with employees at its Barclays Financial Planning unit, which offers face-to-face financial planning services to customers.

"We're only in consultation at the moment but we're looking at approximately 1,000 people," a spokesman told AFP via email, when asked about the number of potential job cuts.

The bank added in a statement: "Barclays has been conducting a detailed review of its financial planning advice over recent months.

"This review has concluded that, given the changes to the retail investment marketplace, it is unlikely that this business would be able to deliver a return that would justify the investment required."

The lender added it was also holding talks with Unite about redeploying affected staff -- but the trade union reacted with anger.

"Barclays management should hang their heads in shame as 1,000 hard-working staff are told they no longer have a job at the bank," senior Unite official Rob MacGregor said.

"Are the senior management of Barclays too busy counting their bonuses that they have totally lost touch with those who make their business successful?

"These highly trained workers will now face a bleak future along with the other 2.5 million unemployed in this country," he added.

In a separate development on Wednesday, Barclays Capital was fined £1.127 million (1.3 million euros, $1.8 million) by the Financial Services Authority (FSA) for failing to ring-fence clients' money.

The British watchdog said in a statement that Barclays had failed to properly protect client money over a period of eight years.

Under current rules a company is required to keep client money separate from its own funds, thereby protecting client money in the event the company goes bankrupt.

The FSA said it had determined that between December 1, 2001, and December 29, 2009, Barclays had "committed a serious breach of FSA client money rules by failing to segregate millions of pounds of its clients' money".

"This posed a significant risk and the penalty reflects the amount of client money involved in this breach."

In response, Barclays Capital stressed that it had not profited "in any way" from the error, which had been corrected.

"We have worked constructively and in full cooperation with the FSA throughout the investigation," it said.

"The segregation error was corrected on discovery. No counterparties, clients, or financial reports were affected and Barclays Capital did not profit in any way."

Back in June 2010, the FSA had slapped a record 33.32-million-pound fine on a division of US investment bank JP Morgan for a similar offence.

Last week the FSA fined Barclays £7.7 million and ordered it to compensate customers up to £60 million after they received inadequate advice on investing in two funds.

© 2011 AFP

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