Barclays is planning to cut hundreds of jobs in its UK investment banking operation, with more jobs expected to go overseas.
As banks cut costs of operations IT is being affected. This is making IT failures more likely as legacy systems become hard to manage.
According to a source, Barclays is planning to reduce VP level staff in its Global Technology Infrastructure Services at Barclays (GTIS) by cutting heads in London and Knutsford, with more functions moving to Lithuania.
“It would be a cost-reduction exercise, not a service quality or resilience improvement," said the source.
A Barclays spokesperson said the bank would not comment on speculation.
The bank is also closing hundreds of retail bank branches. Barclays currently has 1,577 branches across the country, employing 33,600 staff.
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Barclays Bank has already said it will cut 1,700 frontline jobs across the UK as part of a strategy to reduce the number of branches as more and more customers use technology to do their banking. Reports said up to a quarter of branches could be closed.
Meanwhile, Lloyds banking group is cutting over 1,000 roles across the UK, half of which are involved in SME lending.
“Some 1,080 employees of the bank will today learn that the company they have worked tirelessly to turn around is rewarding them with a P45,” said Union Unite. “Lloyds Banking Group is well on the road to recovery, with the CEO being recently rewarded handsomely with a share bonus in the region of £2.5m, yet staff are being made redundant.”
An industry source warned banks against mass IT job cuts and offshoring if they want to avoid IT glitches, such as the recent outages experienced by RBS and Lloyds Banking Group. “In my humble opinion the IT issues are due to cost cutting, outsourcing and offshoring - not to do with legacy systems that have worked fine for the last 40 years. The problem is these systems are being handed over to people who don't know how to look after them. Who learns PL/1 or COBOL these days? The new generation is into Java and C#... If you grew up with COBOL or PL/1 you're probably 60 and thinking more about retirement!”