Barclays follows Citi, Goldman and Morgan Stanley in cutting 100 investment bank jobs despite rate hike profits

Barclays will follow Citi, Goldman Sachs and Morgan Stanley in cutting more than 100 investment banking jobs, according to Sky News’ Mark Kleinman.

The London-based bank is set to axe the jobs following the industry slowdown in deals and IPOs. The layoffs will be spread across multiple countries and across divisions in the bank, it was reported.

2022 was a very difficult year for investment banks with political and economic volatility leading to a slump in dealmaking.

According to Refinitiv data, mergers and acquisitions worth $1.4tn were announced in the second half of 2022, down from $2.2tn in the first half of the year.

Things have not got any better in the new year, particularly in the UK. Last week it was reported that the total number of bids for UK firms fell by over a quarter on the same period last year with just 11 new firm offers made to buy UK listed companies, according to data from broker and investment bank Peel Hunt.

Meanwhile, London managed only five IPOs in the first quarter of 2023, raising just £81m as the City’s flagship exchange struggles to attract new participants.

Already this year, Citi, Goldman Sachs and Morgan Stanley have cut more over 1,000 jobs between them, while Barclays has axed around 200 in its investment arm, it was reported last November.

Hargreaves Lansdown’s Susannah Streeter said: “As volatility has hit markets, fees for its large investment division have been weaker than forecast, and its already been anticipating a higher number of loan defaults.”

Barclays’ latest round of redundancies comes just days after US banking giants recorded soaring profits thanks to higher interest rates.  

On Friday, JP Morgan Chase reported its profits were up 52 per cent, while Wells Fargo and Citi both exceeded expectations.  However, investment banking revenue remained has relatively muted.

Barclays is less reliant on interest income than many of its competitors – particularly in the UK – due to its large investment banking division.

As a results Streeter said Barclays was unlikely to have enjoyed “quite so much of the benefit of higher base rates compared to some of its peers.”

Banks have been heavily scrutinised over the past few weeks. Last month, the banking sector was rocked by a near-crisis with the collapse of Silicon Valley Bank, and Credit Suisse, which was bought by UBS. 

Barclays has been approached for comment about the job cuts.