Just before Christmas, Barclays gave out pink slips to 15 bakers and traders, clouding the celebrations for some of its employees. In addition, the Post reported that the company had revoked their bonuses.
15 Wall Street professionals lost their expected windfall among the 50 companies that were laid off last month. For comparison, it is said that investment bankers usually receive a salary of USD 200,000, with bonuses that can reach USD 1 million.
Lawsuite being considered to fight Barclays decision
Lawsuits are currently being considered by a number of the fired employees, with claims potentially worth over USD 10 million. They contend that even if they are fired before the year is out, they should still be eligible for bonuses because they are accrued gradually throughout the year.
Barclays fires over a dozen bankers, traders before Christmas — without giving them bonuses https://t.co/SaLUu1u2fi
— FutureTrump2️⃣⏺2️⃣4⃣ (@RealTrump2020_) December 28, 2024
According to the experts, quoted in TOI, the likelihood of legal success is low because employment contracts typically state that bonuses are only awarded to currently active employees.
Wall street worrying over overall employee morale
In addition to causing resentment among the impacted employees and larger Wall Street circles, the layoffs and denied bonuses have raised questions about how to strike a balance between cost-cutting initiatives and preserving employee morale.
Considering the possibility of legal disputes, this episode provides a clear illustration of the difficulties financial institutions encounter in balancing employee satisfaction and economic efficiency.
Barclays quartery results
For the July-September period, the British bank's pretax profit was 2.2 billion pounds (USD 2.85 billion), up from GBP 1.9 billion in corresponding quarter in previous financial year.
While fees earned in the bank's debt capital markets business increased 48 per cent year over year to GBP 344 million, advisory fee income increased 133 per cent to GBP 186 million.
The revenue from equity fundraising was GBP 64 million, a 3 per cent increase from the previous year. However, nearly half of that amount was recorded in the second quarter of 2024.