Friday, 13 November 2015 20:54
NEW YORK/LONDON: British bank Barclays Plc has put a freeze on hiring new staff until the start of next year as it steps up efforts to cut costs and raise profitability.
A Barclays spokesman said the hiring freeze had been in place since late September and was due to be reviewed at the start of January.
There are exceptions to the freeze, including to fill vacancies for UK branch staff and for some critical positions, as well as vacant positions in low cost locations, the spokesman said.
Across Europe, investment banks are retrenching and cutting costs as they lose share to US rivals that acted more quickly after the global financial crisis to regain profitability.
Wall Street banks are estimated to make an average return on equity (ROE) of 12.4 percent in 2015, versus 8.3 percent for their European peers, Morgan Stanley analysts calculate.
Many banks are taking an increasingly hard line on costs in an effort to improve profitability. Barclays is midway through a three year plan to cut costs, which involves shedding 19,000 staff, or about 14 percent of its global workforce.
John McFarlane has increased the focus on costs after taking over as Barclays chairman in April.
The bank’s incoming Chief Executive Jes Staley, who starts in December, is also expected to try to find more savings.
Deutsche Bank announced in October it would cut 15,000 jobs at Germany’s biggest bank, exit 10 countries and cut costs to less than 22 billion euros by 2018 after splitting its investment bank in two.
That same month, Switzerland’s Credit Suisse announced a big restructuring plan under new CEO Tidjane Thiam.
Alongside raising 6 billion Swiss francs from investors, Credit Suisse will cut 1,600 jobs in its home market and relocate up to 1,800 positions from London where costs are particularly high.
The Swiss bank this week started a round of 100 job cuts in London, predominantly in the fixed income rates and foreign exchange divisions, according to market sources.
