Barclays to Slash Jobs, Investment Bank

NEW YORK (The Deal) -- The U.K.'s Barclays (BCS) on Thursday, May 8, announced it will pour £115 billion ($195.1 billion) of primarily investment banking assets into an internal "bad bank," which will also house mainland European retail banking operations.

Announcing the outcome of a long-awaited strategy review, CEO Antony Jenkins also said Barclays will cut an additional 2,000 jobs this year. That would take 2014 job cuts up to 14,000, with about 20,000 cuts planned by 2016, of which 7,000 will be from investment banking.

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The news came after first-quarter figures on Tuesday revealed a worse-than-expected 41% slump in profit at the investment bank, which was expanded and championed by former CEO Bob Diamond, who resigned in July 2012 following a Libor-rigging scandal.

Jenkins, a retail banking veteran installed at the helm with a remit to transform Barclays culture, said £90 billion of investment banking assets, and the £16 billion of assets represented by retail banking businesses in Spain, Portugal, Italy and France will form the bulk of the noncore unit, with Barclays expecting to have more than halved the "bad bank" assets by 2016.

Jenkins also said investment banking will account for no more than 30% of core assets by 2016, down from more than 50% right now. The London institution didn't give a breakdown between those noncore assets it wants to sell and those it will simply run down and a spokesman declined to comment on any pending auctions.

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