GO
Loading...

Barclays CEO defends plans as 19,000 jobs cut

Antony Jenkins, the chief executive of Barclays who is engaged in a radical shake-up at the bank, has defended his plans for job cuts and bonuses.

He told CNBC: "This is about Barclays' future as a balanced and international bank."

Barclays will cut a total of 14,000 jobs this year, higher than the expected 10-12,000, and a total of 19,000 will go between now and the end of 2016. Investors cheered the move and sent the stock up over 5 percent.

This includes cuts of 7,000 at the investment bank by the end of 2016, as it is shrunk to around 30 percent of the overall business, down from over 50 percent at the moment. Jenkins has had to re-focus the bank from investment banking towards its traditional retail bank operations.

Barclays share price rose by 5 percent in early trading on Thursday, as the market welcomed the announcement.

Analysts at Citi described the moves as "sensible" and added they "should be well received."

Simon Dawson | Bloomberg via Getty Images

Read MoreBarclays: Don't expect a magic wand

"Regulation has become much clearer and the impact of regulation on the investment banking business," Jenkins said.

"We also believe that the economic environment has depleted for the fixed income, currencies and commodities (FICC) business. Some of the problems are structural as well as cyclical."

A new non-core division will be created at Barclays as part of Jenkins' transformation of the bank. This unit will contain around £115 billion ($195 billion) of assets deemed non-essential to the business, and is dominated by assets from the investment bank, particularly the FICC division. There is also around £16 billion of assets from the bank's European retail operations.

Read MoreBarclays bosses confident despite shareholder disquiet

Jenkins, who took charge after Bob Diamond stepped down following the Libor scandal, said: "Assets are generally performing well, this is not about a bad set of assets we want to sell off. This is about things that are not strategic for us.

He added there is a possibility that Barclays may spin out its European retail operations via an initial public offering.

The restructuring will cost a further £800 million, on top of an already announced £2.7 billion.

Read MoreBarclays profit falls ahead of reorganization

Jenkins attracted controversy earlier this year after bonuses rose at the bank, despite falling profits, as it tried to retain key investment banking staff.

He defended his position on bonuses, saying: "I knew that we were going to execute a very significant transformation and I knew that we had to protect the people we wanted to retain."

"The actions we took to protect these people and keep them within Barclays were the right actions."

Many of those who have departed from the bank came with the acquisition of part of Lehman Brothers after its ignominious collapse during the credit crisis.

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*

Europe Video