Barclays Fires Employees Before Christmas, Strips Bonuses: What's Next For Them?

The festivities were marred for some employees of Barclays as the company handed over pink slips to 15 bakers and traders just before Christmas. Furthermore, the company also stripped them of their bonuses, a report by the Post said.

Among the 50 employees laid off last month, 15 Wall Street professionals lost their anticipated windfall. To put it in perspective, investment bankers typically earn a $200,000 salary, with bonuses that can climb as high as $1 million, according to industry insiders.

“A good employer will pay the bonus pro-rata for the time worked during the year, but some don’t,” noted Tanvir Rahman, an attorney at Filippatos, calling Barclays’ decision "heartless."

Goldman Sachs and Bank of America usually pay partial bonuses to employees dismissed but Barclays did not opt for that route.

The fired bankers are reportedly considering lawsuits seeking $10 million or more, arguing that bonuses are earned throughout the year and should not be treated as discretionary. However, Rahman cautioned that their chances of success are slim, explaining, “Banks often stipulate in their labour agreements that you must be employed at the time of the bonus to receive it.” Some may pursue arbitration with the Financial Industry Regulatory Authority (FINRA) as the next step.

A Barclays spokesperson justified the layoffs, stating, “We regularly review our talent pool to ensure that we are investing in talent, delivering for clients, and best positioned for long-term success.” The cuts are part of Barclays’ three-year strategy to streamline operations and reduce its reliance on investment banking revenue. This comes despite expectations of a 20% increase in bonuses in some departments this year due to a rebound in dealmaking.

This is not Barclays’ first move to tighten payouts. In 2023, the bank reduced bonuses by 43% amid declining revenue, and last year, dozens of bankers received no bonuses at all.

With lawsuits looming and tensions rising, Barclays’ holiday layoffs may serve as a cautionary tale for Wall Street firms trying to balance cost-cutting measures with maintaining employee morale.

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