 "Barclays fires 15 bankers, denies bonuses ahead of holidays; faces flak")
Barclays recently terminated 15 bankers and traders in New York just before the holidays, opting to issue termination notices instead of year-end bonuses. The UK-based bank also withheld the annual bonuses, a crucial component of these employees’ compensation, according to a report in The Times of India.
Missing out on expected rewards
The 15 professionals were among 50 employees who were let go last month, seeing their anticipated bonuses disappear. Investment bankers typically receive a $200,000 salary, with bonuses that can reach up to $1 million, the report said.
Tanvir Rahman, an attorney at Filippatos, expressed his disapproval, stating that a responsible employer would typically pay out a pro-rata bonus for the work completed, but some companies don’t. He called Barclays’ decision "cold-hearted".
Rivals such as Goldman Sachs and Bank of America reportedly offered partial bonuses to employees let go late in the year, but Barclays chose not to follow this practice.
Legal action under consideration
The dismissed bankers are reportedly exploring legal action, with some contemplating lawsuits seeking upwards of $10 million, arguing that bonuses are earned during the year and should not be considered discretionary. Rahman, however, warned that their chances of success might be low, saying, “Banks often stipulate in their labour agreements that you must be employed at the time of the bonus to receive it,” the report said.
Some may also pursue arbitration through the Financial Industry Regulatory Authority (FINRA).
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Barclays’ justification
A Barclays spokesperson defended the layoffs, explaining that the bank routinely assesses its workforce to ensure it's investing in talent, meeting client needs, and positioning itself for long-term success.
The layoffs are part of the bank’s broader three-year strategy to streamline operations and lessen its dependency on investment banking revenue. Despite this shift, Barclays had been expected to raise bonuses in certain departments by as much as 20 per cent due to a resurgence in dealmaking, the report said
A history of reducing payouts
This isn’t the first instance of Barclays tightening its bonus distribution. In 2023, the bank reduced bonuses by 43 per cent as revenues declined, and last year, many bankers received no bonuses at all, the report said.
With lawsuits looming and employee frustration mounting, Barclays’ decision to lay off workers during the holiday season may serve as a cautionary example for other Wall Street firms weighing cost-cutting against employee morale.