Barclays Investment Bank - a division of
) - is set to eliminate nearly 275 jobs in New York City. These
layoffs are a part of the company's strategic overhaul aimed at
reviving its profitability.
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Barclays had disclosed its plans to retrench employees in a
filing with the New York State Department of Labor. The company
is liable to give a notice period to the employees under The
Worker Adjustment and Retraining Notification Act (WARN Act).
Under this Act, it is necessary for most employers - with 100 or
more employees - to provide an advance notification of
60-calender day to the employees, before the closure of the plant
and mass layoffs.
The layoffs will take place during a 14-day period beginning on
May 15, 2013. The company held the economic factors responsible
for the layoffs. The reduction in headcount will occur at the
company's 3 offices in the New York City - 200 Park Avenue, 745
Seventh Avenue and 130 Avenue of the Americas.
Over the past year, Barclays has been under tremendous pressure
owing to unsettling macro economic factors. In addition, the
company is embroiled in various controversies highlighting its
scandalous activities. Earlier this week, the company set aside
additional £1.0 billion ($1.6 billion) to meet litigation
expenditures pertaining to the dubious sale of financial
Further, in 2012, Barclays reached a $453 million settlement with
both British and U.S. regulatory bodies over the manipulation of
the London Interbank Offered Rate or LIBOR. Similar to Barclays,
another European bank,
) has been ordered to pay a penalty of CHF 1.4 billion ($1.5
billion) to the U.S., UK and Swiss authorities to resolve charges
against the bank for its involvement in LIBOR rigging.
Barclays' financials are battered by innumerable problems,
prompting its management to undertake revamping efforts. The
company is likely to announce restructuring initiatives along
with its fourth-quarter earnings on Feb 12. It is probable that
the company could retrench around 2,000 employees in total.
In addition, Barclays is anticipated to slash bonuses for
investment bankers for 2012 by roughly 20%. The CEO of the
company has let go off his bonus for the past one year. Similar
) have also slashed bonuses and retrenched employees.
The Zacks Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) for Barclays is 0.00%. This, coupled with its Zacks Rank #4
(Sell), indicates that the company may miss the Zacks Consensus
Estimate for the fourth quarter.