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Barclays is raising the bar on outside hires, not replacing open roles

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Barclays has raised the bar for hiring outsiders and is leaving vacant roles unfilled — resulting in what some insiders say amounts to an informal hiring freeze for investment banking, FICC trading, and certain back-office roles — according to five sources familiar with the situation.

Those descriptions show the on-the-ground impact of an approach that Barclays executives in recent months have stopped short of characterizing publicly as a blanket freeze.

A shakeup in late March included the shock ouster of investment bank chief Tim Throsby, who had ramped up managing director hiring since joining in 2016. His deputy, Art Mbanefo, exited soon after. Ravi Singh left in April just four months after joining Barclays, along with David Simpson, an MD in London also under Mbanefo. Guy Saidenberg, head of distribution and structuring for markets, exited in May.

One source familiar with the situation told Business Insider the firm has upped the standard for making external hires.

Two other people familiar with the situation said Barclays is not replacing some employees. The bank’s fixed income, currencies, and commodities trading business is not filling roles of people who leave, one of the people said. Another source familiar with the matter described a holding pattern for hiring for some back-office roles in the US.

Three of the five sources said the process has been viewed internally as an informal hiring freeze that has been in place for several months.

Barclays is keeping a tight leash on pay, particularly for investment and corporate banking, and set aside less so far this year for bonuses. That comes as it cuts costs to hit return targets set by CEO Jes Staley. A list of banks have been curbing hiring or cutting jobs as they ride out trade tensions, economic uncertainty and a souring outlook for interest rates.

The UK-based bank shed 3,000 jobs company-wide in the second quarter and upped its 2019 cost-cut outlook, and is meanwhile navigating uncertainty around Brexit. Still, it has announced some high-profile strategic hires including people that came onboard after Throsby’s exit.

A Barclays spokeswoman declined to comment.

Read more: Headcount at the world’s largest investment banks shrank by 1,500 in the first half of 2019, and equities trading took the brunt of it

‘Very, very selective’

To be sure, the firm continues to advertise for positions online. And it could not be determined precisely how many people have been affected by Barclays’ hiring strategy, or how many divisions might be taking that approach.

Kristin DeClark and Taylor Wright, co-heads of Barclays US equity capital markets, joined the firm from Deutsche Bank and Morgan Stanley, according to industry records. DeClark was announced the day after Throsby’s exit became public, while Wright was announced late May and came on in August.

And Bob Peck, a veteran internet analyst, joined Barclays as the chairman of global internet banking from Credit Suisse. That move was announced before Throsby left, and Peck started in June.

When it comes to the back-office roles, Barclays has been shifting some of its US operations and tech employees from New York to a large campus it purchased in 2017 and opened last summer in Whippany, New Jersey. According to a public filing in early July, COO and functions teams are set to move starting mid-November.

Read more: Credit Suisse has started an informal hiring freeze — and it’s a sign of just how tough the Wall Street job market is these days

Analysts have pushed for clarity on hiring. When asked directly during an early August call if there was a hiring freeze, the bank’s finance director, Tushar Morzaria, said it has been “very, very selective” but that a freeze was “probably not really the right way of doing it.” Barclays has been “only really hiring for roles that we really need, given the income environment,” he said.

The bank has also been shrinking headcount through “natural forces” by not hiring to replace “which has been quite a successful thing for us,” Morzaria also said on that call, and it would “see where that goes” in the second half.

Barclays had been deploying capital into sales and trading and underwriting, but by a September 2018 call, Morzaria said: “We are by and large done with that. We’re happy with the level of capital allocated.”

Read more: A management overhaul at Barclays is rocking employees. Here’s what we know about what’s going on inside the British investment bank.

MD departures

There have been a number of high-profile departures from Barclays recently, including five investment bankers from the Americas financial-institutions group, Business Insider reported in August.

The group had no plans to replace those departing FIG bankers, though a person with knowledge of the group’s plans said at the time that promotions and recent hires may mean it ends 2019 with the same number of managing directors. Sources had said a shrinking bonus pool prompted some of those moves. Through the first half, Barclays cut money set aside for bonuses by 23% from the year prior.

Barclays announced it hired Dan Zimbaldi from Evercore in June as an MD in FIG M&A, and he starts in September.

Separately, New York-based investment banking MD Aiden Hallett left in July after getting promoted just months earlier. The bank named 85 new MDs in late 2018— promotions effective at the beginning of this year.

Barclays has started culling its global markets team, which spans credit, distribution, equities, and macro, Business Insider and other media outlets have reported in May. The bank said it had 85,000 employees globally at the end of 2018.

Read more: Barclays has lost a quintet of FIG bankers over the past month — and it shows how Jes Staley’s bonus cuts may be affecting morale

Striving for a return target

Barclays wants to hit above a 9% return on tangible common equity this year and 10% in 2020, but analysts had noted their own predictions didn’t line up. Activist investor Edward Bramson has meanwhile been pressuring the bank to pare back investment banking, though in May failed to nab a board seat.

Hiring across Wall Street is typically more common in the first half, though that has changed somewhat in recent years thanks to rising competition and the tightest US labor market in half a century.

Industry headcount across investment banking, equities trading, and FICC continued to fall in the first half of 2019 while revenue slumped, Coalition data tracking the world’s biggest banks showed on Thursday.

The Barclays hiring shift comes as the broader industry grapples with trade tensions and global economic uncertainty, and technology that has reduced demand for higher-touch trading. And banks have added pressure on what they can make from lending after the Federal Reserve started cutting already historically low US interest rates in August.

Deutsche Bank is slashing 18,000 jobs and exiting businesses including equities trading. Barclays remains “committed” to US and European equities, Staley said on a second-quarter earnings call, and picked up some $20 billion in prime brokerage assets reported to come from Deutsche Bank.

Credit Suisse has an informal hiring freeze in place across parts of its sales, trading, and research unit, Business Insider reported in early August. Citigroup is laying off hundreds across equity and fixed-income trading, according to reports in late July.

Barclays’ shares have fallen 56% in five years while a large banking sector exchange-traded fund has risen 22%.

Read more: A top Citigroup executive is departing as the bank winds down a secretive $1 billion business amid competition from private equity

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