Barclays Plc announced Wednesday that it will cut 1,000 jobs following a decision by new CEO Bob Diamond to stop offering financial planning advice in the UK bank’s retail branches.
The layoffs, scheduled to hit on Feb. 18, follow the bank’s decision to focus its investment advice on online customers, Reuters reported Wednesday.
Diamond, who took over as CEO on Jan. 1, “is intensifying scrutiny on returns across his bank and is expected to unveil more shifts in focus with the release of 2010 results on February 15,” according to the Reuters story.
The proposal to move away from offering financial planning advice through Barclays UK Retail Banking follows a decline in commercial viability in recent years and the expectation that this decline will continue, according to a Barclays news release.
“It also reflects the emerging trend that customers are increasingly purchasing and managing their investments online,” the release said. “This is expected to increase steadily and is a contributing factor to why Barclays proposes to offer retail investment services solely online.”
Barclays had conducted a close review of its financial planning advice over recent months. The review concluded that retail investment changes made it unlikely that the business would be able to deliver a return that justified the investment required.
The bank is now in talks with employees of Barclays Financial Planning (BFP), the division of Barclays that offers face-to-face financial planning services to retail customers. It is also consulting with the employees’ union, Unite, and seeking “a full range of redeployment services identifying potential options within and outside Barclays.”
Barclays recently launched an online “Investor Zone,” and will focus future strategic investment on enhancements to this service. All existing plans and investments held by customers to date will continue to be serviced by Barclays and by the bank’s product and fund management partners.