Barclays is shrinking its U.S. consumer banking division as it looks to lower costs.
“We recently streamlined and simplified our U.S. Consumer Bank operating model, which has regrettably resulted in a limited number of roles being made redundant,” a spokesperson for the British banking giant said in a statement to PYMNTS Wednesday (Oct. 25).
“These decisions are never easy and employees whose roles have been impacted will receive a full range of transition services, including severance and job outplacement support,” the spokesperson said. “We continue to execute our strategy well in a challenging macro environment and we continue to invest for our long-term growth.”
Those cuts amount to dozens of layoffs, or 3% of the consumer division in the U.S., Reuters reported Wednesday (Oct. 25), citing a source familiar with the situation. Staff were informed on the news earlier this week, the source said.
Barclays CEO C.S. Venkatakrishnan said last month the company planned to cut hundreds of jobs, following in the footsteps of a number of other financial institutions, which are also reducing their workforces.
“We always continually modulate and modify that work force,” Venkatakrishnan said.
This year has seen a number of banking sector job cuts, including among some of the country’s largest banks.
Aside from JPMorgan Chase, the country’s biggest lender, America’s five largest banks have eliminated 20,000 positions in 2023, with more layoffs due as the finance world deals with ongoing impact of interest rates on the mortgage sector.
Marianc added that banks are likely to make even larger cuts in 2024 as they face increasing defaults on corporate and consumer loans.
“They need to find levers to keep earnings from falling further and to free up money for provisions as more loans go bad,” he said. “By the time we roll into January, you’ll hear a lot of companies talking about this.”
The move is projected to reduce the company’s 2024 expenses by $325 million at a time when it is focused on expense management, “particularly in the current environment,” PNC President and CEO Bill Demchak said on an earnings call earlier this month.