Barclays is to cut 7,000 jobs from its investment banking division by 2016 as part of a strategy review.
The bank has already announced job losses across the group of 12,000 for this year, but this has been increased to 14,000 as a result of the investment bank changes announced today. It brings the total cuts by 2016 to 19,000.
It comes two days after Barclays announced that first quarter earnings from the division fell by half, meaning profits at the group slid by 5%.
About a third of the investment bank job cuts announced today - more than 2,000 - will be in the UK.
The strategy review, described by chief executive Antony Jenkins as a “bold simplification” of Barclays, will also see it hive off its European retail banking business into a so-called “bad bank”, comprising £115 billion of “non-core” assets.
This will include all its customer branches in Portugal, Spain, Italy and France as well as a chunk of its investment banking operation including fixed income, currencies and commodities (FICC), plus emerging markets products.
Barclays largely attributed its first quarter profit fall to its FICC unit.
The non-core unit groups together businesses which do not fit the bank’s “strategic objectives” or profitability criteria under the review and the bank will “look to exit or run down these assets over time”, it said.
Mr Jenkins said: “This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage.
“In the future, Barclays will be leaner, stronger, much better balanced and well-positioned to deliver lower volatility, higher returns and growth.”
The changes will dramatically shrink the importance of the investment bank, which currently accounts for more than half of Barclays’ size, to no more than 30% by 2016.
This division employed around 26,200 staff - around 10,000 in the UK - at the end of last year, but this had already shrunk to about 24,000 over the start of 2014.
Barclays did not give a breakdown of where the axe would fall when it announced 12,000 job cuts earlier this year.
But with more than 2,000 gone from the investment bank this year already and 7,000 more announced today, the investment bank looks likely to have shrunk by 10,000 or more - from its size at the end of last year - by 2016.
Highly paid staff at the division have been at the centre of controversy at Barclays, which last month received a bloody nose from shareholders as it hiked the staff bonus pool by 10% to £2.38 billion last year despite profits falling by a third.
The Institute of Directors has complained that this was nearly three times the £859 million paid out in dividends to shareholders.
Shares rose by as much as 4% after the announcement.
Dominic Hook, Unite national officer, said “These have been extraordinarily turbulent times for ordinary Barclays workers who have worked hard to keep the bank on track against a backdrop of continued uncertainty and redundancies.
“The bank needs to recognise their tireless work to put customers first while jobs have been lost and give reassurances over their futures.”
Commenting on news that Barclays is to make 19,000 job cuts in an attempt to make savings, Charlotte Webster, Campaign Manager, Move Your Money said: “As 19,000 jobs go at Barclays, so too does part of British Banking history. And this is not one we remember with great affection, lets face it.
“Despite their scale, as one of the five banks often termed ‘too big to fail and too big to jail’ they represent the old school.
“Meanwhile people are talking with their feet, with 2.4 million people opening accounts with other providers that offer more transparency and don’t combine investment and retail arms. Britain is already moving on to a new financial system, with new jobs as the UK leads the alternative finance revolution. Looking for a fresh, modern approach to finance, peer to peer lending volumes in this country alone are doubling every six months, having now passed the £1bn mark.
“The world of finance is on the move, driven by people not the banks.