British multinational banking and financial services company, Barclays is all set to announce the cut down of 19000 jobs by 2016, the BBC news states. The company facing slowdown due to the heavy debt will be returning to its original roots; Retail. Barclays profit fell by 5% in earlier this year and its investment banking business profit dropped by 28%.
The news comes at a time when the world economy is supposed to be recovering from global meltdown. Other banks like Royal Bank of Scotland, UBS and many other global banks has used similar strategies of cutting their investment banking activities and focusing on core banking activities. Chancellor George Osborne has said that although all the job loss is regrettable but their main focus is on getting the firm back on right track and support British economy. But does that give any respite to laid-off employees? Of course not, losing jobs is not something employees look forward to.
The fact is the lay-off thing could have been handled better way. Laying-off employees is not the only economic way of cutting costs. During one G20 summit in Canada, Banks let their workers telecommute from home or other location to reduce the presence of employees in the buildings during the summit. The point here is that Banks didn’t want the work to be interrupted during the summit. Likewise, other banks can also let their employees work from home or any other site, this way the cost of commuting, office supplies, electricity bills, equipment, office space can be reduced to certain amount.
On the other hand it is not fair not to consider the problems of the employers. Chief Executive Antony Jenkins cannot be held wrong for his move to refocus and resize the company’s investment bank business to bring a financial balance in Barclays. He had been under lot of lot of pressure since taking over from his predecessor Bob Diamond, to cut down the loss and boost returns. The radical move has already raised many eyebrows as many believe that the move will not have huge impact in recovering the loss. It is true cutting down jobs will increase the unemployment and is that not a bad thing for economy? Companies saving money but making employees jobless is not the right answer for improving the conditions of the company.
What Banks can do is look at alternative methods to deal with the issues. Telecommuting is one such cost-cutting idea which could help companies deal with lays-offs. By allowing employees to work from home, the companies not only save money, they can also retain their most talented employees too.