Be Excellent To Each Other

http://www.bbc.co.uk/news/business-26131799

Bonuses up 10%, £5.2bn in profit last year, cutting 10000 jobs, 7000 in the UK.

Now i'm as capitalist as they come, but even that makes me think... Really? That's taking the piss a bit isn't it?

Not to mention they mislaid a USB stick with a lot of folks details on it. http://www.bbc.co.uk/news/uk-26106138

It's fucking disgusting.

But if they cut bonuses all the good people will leave! Nobody any good will work for anything less than an obscene amount of cash.

The whole thing is so obviously fucked, I don't know how people can go along pretending it isn't.

All those 'good people' did well for them before. I'm no hardline lefty socialist, but this really stinks.

I was wondering what your point was, then read the link and realised you'd missed out a rather key word there. I've added it for you in bold

That changes things slightly, but bonuses should still not be going up if they are cutting 10,000 jobs.

No, read it again. Their profit fell to £5.2bn, not dropped by.
i.e. their profits fell this year, but they still made £5.2bn even then...

Now I'm outraged again!

What trooper said.

Good job Mr K doesn't have to look at important legal documents.

Either way profits fell, which was the important point that seemed to be missed in the OP. Bonus up while profit down = not good economics. And a piss take if jobs are being cut too.

My point was, they made £5.2bn last year, yet feel the need to cut 10000 jobs.

That was the entire point of the thread, you muppet!

Yes, I understood that, it's just that the OP left out the critical piece of information - £5.2bn profit plus bonus sounds reasonable unless it's with the context of "and profit was down on last year".

On the other hand, the job cuts sound unreasonable unless you include the "and profit was down".

It all depends on what profit they made the year before. A drop from £6bn to £5bn isn't an issue. £100bn to £5bn suggests they are tanking.

We made record profits and I was short listed for employee of the year. Just found out my bonus was £0.00

To my mind, if profit is down, bonuses should be down, otherwise you're basically stealing from the shareholders.

On the job cut point, yes, I agree.

Kinda depends. A lot of the time bonuses may be predicated on performance that has a greater impact than just on last year's P&L. Bring in a major corporate banking client that will raise revenues for years to come? That's worth a bonus, even though none of that money probably materialised in time for the 2013 profit figure. It's not quite so cut and dried as bonuses needing to follow profits.

Though cutting 10000 heads when you're showing really quite healthy profits is pretty bad.

If you don't need those 10,000 people you can't just keep employing them "because". Does anyone know why they're actually letting them go?

This also is true. They've not said, but looking at the rest of the market (including ourselves) it'll be a cost reduction exercise, and they'll be getting rid of back office roles - so not branch staff or traders, but IT, facilities, and operations.

Also, if someone could explain this
that would be lovely.

[edit] I got the other one myself!

Well, the point of the thread was not that bonuses were up while profits fell, it was that this is hardly the capitalism ideal of trickle down wealth creation.
Capitalism needs a stable economy, hell any ethos needs that, and the key driver for a stable economy is high employment and job confidence. I have no idea what Barclays think they are playing at, when a £5.2bn profit isn't deemed enough to keep their employees in work. What do they want that extra £1bn for that they'll get by cutting jobs if it's not for expansion and hence job creation?

I just don't get it, I don't understand how these intelligent people at bank board levels aren't prioritising a stable economy, especially after the last debacle.

Because there is literally zero incentive for them to do so.

I'd have thought hindsight and understanding that a stable economy is good for everyone is a reasonable incentive...

Yeeees, well, having seen some of the IPO prospectuses we worked on with various banks, and then watched what actually happened compared to what the bank told people would happen, I thnk bonuses should actually follow the profits. The bonus pool was up, remember - I've got no issue with an individual being rewarded extra for being employee of the year or whatever, but the bonus pool going up suggests that the lot of them were getting more money.


Yes, assuming that this was "clear" profit rather than trading profit, which it sounds like it was from the BBC site.

Statutory profits are basically using a standard set of accounting tools to give a bare-bones valuation of cash in, expenses out. You then plough a hell of a lot more stuff like predicted bad debt write offs and shit into that to get to your adjusted profits figure. So the adjusted is more subjective, but intended to be closer a measure of the company's actual performance. Need APoD for it, really.

HAHAHA.

The banking sector still rewards short-sighted greed over long-term stability. I can't see how this will ever change.

(to Curio)

Completely. Politicians get blamed for being short term, but companies are only marginally less so. Company heads - at least of the big ones where they're not exactly close to shareholders/wider costs of their actions - fundamentally act in the interest of their bonus over the next year or three.

Also, while I know what Trooper meant, I take issue with people describing themselves as 'capitalist' unless they can tell me where I should invest my money based on where their wedge is put. Unless you've hefty capital invested somewhere, you're a 'capitalism supporter'. Or, probably, a 'consumer'. Which is a bit less sexy.

You're honestly surprised? Trickle down wealth creation doesn't work, the money is undeniably becoming concentrated into the hands of fewer and fewer people.

Oh, man.

Fair point, if a trifle pedantic.

I can invest your money for you no problem though, just send it over and i'll send you your return next year.

Wut?


That should have been "a" lot, but either way, the people supposed to be generating bigger profits didn't, yet the bonus pool went up.

This was a joke, yes?

The people at the top did just fine out of the banking crisis. For every top boss who fell (with a 50m severance package) there were 100 who were absolutely raking it in.

The idea that because the bonus pool went up, bonuses went up across the board. Bonuses aren't flat rate percentages - I wouldn't be in the least bit surprised if that overall bonus pool increase meant a better bonus than last year for high-ups and well performing front office folks, but a bonus drop on last year for everyone else.

Mildly a joke. I know exactly why it is like it is, but it would be nice if it was different.

I was just talking about the high-ups and traders, to be honest - had forgotten about the poor desk clerks in the branches.

You should be running a bank, you'd fit right in

*grabs pitchfork*

And lowly hard-working IT folk

Yeah, us eternal 'cost centres'. I'd like to see how much fucking money their profit centres can make if we all just downed tools one day.

The CFO of a large energy company I used to work for once called IT an 'unnecessary evil'.

They're hiding profits, as the article says profits are only down because of making a previous 7000 people redundant. Another 10-12k out this year will mean even lower profits next year.

Meanwhile I assume someone is mopping up shares at lower price because of this poor performance, ready to sell them in 2 years when suddenly profits are enormous due to paying 20k fewer people and not having restructuring dragging it down.

Either that or they know something REALLY bad is coming and are getting ready for it.

In my last job the IT staff were (mostly) highly valued as not just a necessary part of the process but people who genuinely brought value so being treated like peons is difficult to deal with. Granted, as I work in the 'European Technology Centre' (i.e. building filled entirely IT staff in a city with cheaper per sq ft cost than the financial centres) I don't come up against this attitude day-to-day, but have heard from people who've travelled in the company that it can be prevalent in other locations. How anyone can literally sit in front of a computer all day using bespoke software to do their job and still think IT is barely required is beyond me.

I work for a global IT outsourcing company now, so instead of my boss it's now my customers who fail to see the value in me.

Don't worry, we've never seen the value in you either.