Barclays will be cutting a total of 19,000 jobs worldwide by 2016 with 7,000 of the lay-offs coming from their investment banking division as the bank says business will be 'repositioned, simplified and rebalanced'.
It is estimated that about 7,000 of the total will be from City of London bankers, 2,000 from the investment arm of the business.
As part of this, high street banks in France, Portugal, Spain and Italy will also go.
The bank’s chief executive, Antony Jenkins, said that they would be ‘leaner, stronger, much better balanced’ in future and would only focus on international banking where Barclays had ‘capability, scale and competitive advantage’.
Commenting on news Charlotte Webster, Campaign Manager for 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 £1 billion mark . The world of finance is on the move, driven by people not the banks."
Warwick Business School Assistant Professor of Finance Lei Mao, who researches banks said:
“Almost all European banks are not performing well in fixed incomes like bonds and in currencies and commodities, but Barclays’ loss of revenue in this sector is the most significant, with it falling by 41 per cent.
“The response of Barclays to cut its investment bank section is timely. Barclays is not likely to reverse the diminishing trend of this business as the whole market is on a downturn because of uncertainty over interest rates and electronic trading taking over.
“The contraction and simplification seems to be a pervasive trend in the industry. To cut 19,000 seems radical and will be a long and painful process, but it is part of the trend in the industry.
“Also by significantly shrinking the size of its investment bank Barclays is adapting to the changing market conditions and will save a huge amount in wages for the shareholders.
“Barclays focusing on the retail banking sector is a smart move. As the UK economy slowly improves, the prospects in the retail banking sector look good and this is a safe area for Barclays to spend its effort to increase revenue.
“Bundling its investment bank assets and its European continental business into a ‘bad’ bank is another sensible decision. The purpose of such a strategy is to shield the good assets – the retail banking business in UK and Africa – from the bad assets that will be bundled into the bad bank. As a result, the high risk in these bad assets will not negatively impact the good assets. The bad bank may not perform well, or may even fail, but Barclays wants to make sure that these possible outcomes will not contaminate its core retail banking sector.”