Barclays to axe 3,000 jobs after profits slide

2nd August 2011, Comments 0 comments

Barclays' net profits dropped more than a third during the first half on falling revenues and exceptional charges, the British bank said Tuesday as it also announced plans to axe 3,000 jobs this year.

Net profit dived to £1.5 billion ($2.44 billion, 1.72 billion euros) in the first six months of 2011 from £2.43 billion a year earlier, Barclays said in a results statement.

Revenue at its investment unit fell, while the group set aside £1.0 billion to compensate clients who were mis-sold credit card insurance.

Analysts had expected net profit of £1.31 billion, according to estimates polled by Dow Jones Newswires.

Barclays said that it had axed 1,400 jobs during the first half of the year, taking its total global workforce to 146,100 staff.

Chief executive Bob Diamond indicated that this trend was likely to continue in the second half, resulting in about 3,000 jobs being cut during 2011.

"You should assume this trend to continue and increase somewhat," Diamond told reporters in a conference call.

The price of shares in Barclays rallied more than 4.0 percent on news of its fresh cost-cutting but ended down 0.12 percent at 216.75 pence, as investors booked profits.

London's FTSE 100 index of leading companies ended with a loss of 0.97 percent at 5,718.39 points.

Pre-tax profit sank 33.0 percent to £2.64 billion, compared with £3.95 billion last time around.

"I am pleased with the progress made across Barclays in the first half," Diamond said in the earnings release.

"We have delivered underlying profit before tax up 24 percent ... despite a lacklustre economic environment in many of our major markets which impacted income generation.

"Our operating expenses have been tightly controlled while we have continued to invest in selected growth initiatives in a number of our businesses."

Barclays has meanwhile become the latest British banking giant to slash costs, after HSBC announced plans to axe 30,000 staff on Monday. The state-owned Lloyds Banking Group shed 15,000 positions in June.

However, HSBC revealed on Tuesday that it would also hire about 15,000 people in emerging markets by 2014 as it particularly looked to Asia's booming financial sector to power future growth.

© 2011 AFP

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