Barclays PLC plans to cut about 300 administrative and support jobs in its investment banking division, according to a person briefed on the discussions.
The company may also eliminate a further 200 contractors, said the source, who declined to be identified because the talks are private. Barclays Capital is not planning to reduce the number of its bankers, the person said.
Barclays has been expanding its securities unit since the 2008 purchase of Lehman Brothers Holdings Inc.'s North American division. Costs at the unit, led by Robert Diamond, rose by one-third after the bank added 1,100 employees in 2010. Revenue at Barclays Capital fell 32% in the first half as income from the rates and commodities operations dwindled.
"Some rationalization of back-office functions is entirely plausible," Ian Gordon, an analyst at Exane BNP Paribas who has an "outperform" rating on the stock, wrote in a note to clients Wednesday. "We see no prospect whatsoever of a reversal of the strategic expansion."
The stock fell 19.05 pence, or 5.7%, to 313.6 pence at the close of trading in London. The shares have risen 14% this year.
Barclays has started a review that will lead to some job losses, according to a spokesman for the London lender, who declined to be identified. Barclays Capital employs 25,500 people globally and generated two-thirds of Barclays' first-half pretax profit.
The firm plans to increase head count by as much as 10% as it expands in Asia and bolsters its equities and advisory unit in Europe, corporate and investment banking co-CEO Rich Ricci said in an Aug. 5 interview.
Revenue from trading bonds, currencies and commodities declined by 40% to $7.7 billion in the first half. Sales at Barclays Capital's equities and prime services unit fell 18% to $1.7 billion because of a slowdown in equity derivatives.