Britain’s Biggest Bank to Trim Staff Up to 20%

Barclays Bank PLC, Britain’s biggest and one of the largest in the world, plans to cut its 87,000-strong work force by up to 20% over the next few years, a spokeswoman said Monday.

“This is a forecast rather than a precise figure,” she said. “It is in line with announcements that other banks have made about intended staff reductions.”

The spokeswoman said the cuts--which could reach 17,400--would take place over the next five years. The company hopes that most can be accomplished through attrition.

The size of the planned cuts surprised the union that has been negotiating a contract agreement with the bank.

“They told us in October that they wanted 1,800 job cuts over five years and hoped it could be done through natural wastage,” said Bank, Insurance and Financial Union spokesman John Brawley.

Brawley said the union plans to meet with the bank today to discuss the retrenchment plans, as well as the new contract agreement.

Barclays has offered its staff a 7% increase, but this has been rejected by the union, which wants 14% plus $980 per worker.

Analysts said the union will have to scale down its demand in view of the pressure on British banks to cut costs as they face declining profits.

“This problem is not peculiar to Barclays,” said analyst Robert Law at Shearson Lehman Bros. “There has been a severe downturn in banking profitability over the past nine months as the U.K. has moved deeper into recession.”

Because of this, Britain’s five largest banks have now announced plans to trim 30,000 jobs over the next several years. Personnel costs make up about 60% of operating expenses at banks.

British banks last year settled on wage raises averaging 8.3%, one percentage point below the rate of inflation.

Analysts expect the final settlement for 1991 to be around 8%.