Barclays Lays Off 250 India Staff

MUMBAI—U.K.-based Barclays PLC has laid off about 250 employees in India in the final leg of reducing its work force as it shifts its focus to wealthy clients from the mass market.

Additionally, 50 to 60 people have been either redeployed to other departments or have resigned in the past couple of weeks, a Barclays India spokesman said Thursday.



"Unfortunately, sharpening our focus [on wealthy clients] and removing inefficiencies means that there will be some job losses," the spokesman said.

After the job cuts, Barclays employs more than 5,000 people in India through its retail, corporate and investment banking, and wealth businesses, as well as Barclays Shared Services and Barclays Technology Centre.

The highest job losses have been in the collections division of the bank, the spokesman said, asking not to be named. However, he declined to comment on the total number of jobs lost in the overall staff-reduction exercise, which began about 10 months ago.

Last year, Barclays said its focus would include corporate and investment banking, wealth management and serving the needs of rich clients. India, the world's second-fastest-growing major economy, has witnessed a sharp rise in high-net-worth clients, which has opened opportunities for wealth management and premier banking services.

"Because of our change in focus, and also because the economy is now on a rebound, we needed a lesser number of people in our collection team," the spokesman said.

According to government estimates, India's economy is likely to expand 8.5% in the fiscal year that began April 1.

Barclays began its Indian retail operations in May 2007. In a bid to establish a wider footprint in the country, Barclays, like most foreign banks, initially expanded through credit cards and consumer loans.

However, as the global credit condition worsened after the collapse of Lehman Brothers in late 2008, the banks' retail portfolios came under pressure from job losses and salary cuts across sectors.

Barclays saw a sharp rise in nonperforming loans on its books. Bad loans rose to 4.59% of total advances in March 2009, from 0.42% a year earlier, and peaked at 6.37% at end-September 2009.

The foreign lender had to make huge provisions against the bad assets, which hurt profitability and forced it to change it focus away from the mass market, analysts said.

"We may have had to take some tough decisions in the last few months to ensure that we have the right focus…we will now be right-sized and well-positioned to serve the needs of our clients,"

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