By Steve Schoonover | 01 February 2016 03:30:58Barclays is closing more than 400 retail stores and laying off nearly 1,000 employees in its investment bank.
The announcement comes as the bank said on Thursday it is slashing its investment by nearly $2 billion, or 12%, to a combined $13.3 billion, as it looks to scale back and streamline its operations in the United States.
The bank, which is also a shareholder in Tesla, said it will slash its investment in its retail arm, the Barclays Retail Centre, to about $6.3bn by the end of next year.
“We have been focused on delivering our retail business in a way that allows us to continue to deliver value for customers and shareholders,” chief executive Ben Broadbent said in a statement.
“The reduction in our investment in the Barclays retail division will allow us to accelerate our transformation in our retail portfolio and to deliver the best value to our customers.”
Banks are generally required to make a “full-year strategic plan” to forecast their future operations, and Barclays is not expected to report any of the bank’s financial results for the quarter.
However, the bank is likely to release more detailed results for next year, Broadbent added.
“It is vital that we keep investing in our business to achieve sustainable profitability, and we have a very positive outlook for the coming year,” Broadbent told analysts.
“I’m sure we’ll get a very good report for next quarter.”
The company has already announced a series of layoffs, which will reduce the total number of people working at the bank to around 1,500.
Barclays will also be laying off more than 1,200 staff in its financial centre, the investment bank said.
Banks typically invest in retail stores as a way to bring in customers, but in this case, they are cutting back on their investment to boost their profit margins.
The investment bank has been struggling with low profitability since late 2014, when the bank suffered a severe blow to its balance sheet.
Barclays has seen its share price fall more than 50% over the past year.
The banking giant said on Wednesday that it would cut its investment and reduce the size of its retail business by about 1% next year as it seeks to reduce costs.
In December, the company said it would reduce the number of stores it operates from more than 4,000 to around 2,000, with the aim of cutting its retail costs by more than 20%.
Barclays has said that the decision to cut costs would not affect its business.
The Barclays Retail Capital unit, which operates the bank branch and other branches across the United Kingdom, will also cut about $600m, or about 2% of its total investment in 2017, Broadbridge said.
The company’s shares are down roughly 20% over last year.