Barclays Weighs Shrinking Global Office Space to Cut Costs
(Bloomberg) -- Barclays Plc is looking to reduce its real estate expenses in the U.K., U.S. and India as the shift to remote working adds fuel to its cost-cutting ambitions.
The bank could announce changes early next year although the board has not taken a final decision on the extent and timing of any measures, people with knowledge of the matter said. Further reducing branches in the U.K., which was already being examined before the pandemic, is one option under scrutiny, the people said, asking not to be named discussing private information.
A spokesman at Barclays declined to comment.
Finance Director Tushar Morzaria has given investors some details of Barclays’ plans, saying in late October “we probably have more real estate in London than I think we would ideally like, and I’m talking about head office or large buildings.”
“Depending again on how the pandemic goes and how working behavior goes, we may have too much in Manhattan as well,” he said. His comments have not been previously reported.
Chief Executive Officer Jes Staley said on an earnings call in October that the bank was assessing “actions to reduce structural costs,” with the details to be determined. He has said it’s important to eventually return to office life, rowing back on comments he made early in the Covid-19 outbreak that headquarters built for thousands of staff might become a “thing of the past.”
Barclays’ headquarters are in a 32-storey skyscraper in Canary Wharf, the east London financial center where it moved in 2005 after about 300 years in the City. The corporate and investment bank, the engine of its revenue growth, is in a separate building nearby.
In New York, the bank is weighing moving its traders and investment bankers to Hudson Yards, which could see Barclays leave the former Lehman Brothers property in Times Square it acquired at the peak of the crisis, Bloomberg News has reported. The bank also has major operations in New Jersey, as well as several cities across Britain and India.
“We’ll be thoughtful and deliberate about what we need to do and when we need to do it,” said Morzaria.
The bank’s network of branches in the U.K. has been shrinking in recent years and that trend is likely to continue. However, Staley has said that executives “recognize the importance, particularly when we’re the last branch in a town, to deal appropriately with that.”
Barclays isn’t the only lender that is trying to take its real estate costs down at a time of squeezed profitability. Lloyds Banking Group Plc is also reviewing its strategy after the pandemic made remote work widely acceptable, CEO Antonio Horta-Osorio has said.
About 75% of Barclays’ 80,000-odd workers have been doing their jobs remotely since the pandemic spread across Europe in early 2020.
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