Barclays has fired over a dozen New York-based bankers and traders shortly before the holiday season, leaving many without the year-end bonuses that typically constitute the majority of their compensation. The move, which insiders described as "heartless," has sparked potential legal challenges, with some of the terminated employees contemplating lawsuits exceeding $10 million.
The UK-based financial giant dismissed 15 Wall Street workers among the approximately 50 employees it laid off in December, according to sources familiar with the matter. These individuals, primarily investment bankers and traders, were not granted their year-end bonuses, which often dwarf their base salaries. In many cases, bonuses can range from hundreds of thousands to over a million dollars, representing the lion's share of annual earnings.
"A good employer will pay the bonus pro-rata for the amount of time worked during the year, but some don't," said Tanvir Rahman, an attorney for law firm Filippatos, as reported by The New York Post.
Barclays defended its decision, emphasizing its commitment to strategic alignment and efficiency. "We regularly review our talent pool to ensure that we are investing in talent, delivering for clients, and best positioned for long-term success as we execute against our strategy," a spokesperson said.
However, the decision contrasts with the practices of some rival firms. Sources noted that Wall Street heavyweights like Goldman Sachs and Bank of America often award partial bonuses to employees terminated toward the end of the year. "It's a common practice in the industry to recognize employees' contributions even when restructuring occurs," one insider noted.
Some of the terminated Barclays employees are reportedly exploring legal options, arguing that bonuses are accrued throughout the year and are not entirely discretionary. Rahman, however, highlighted the challenges of such cases. "Banks often include clauses in employment contracts stipulating that employees must be actively employed at the time bonuses are awarded," he said. These disputes often end up in arbitration with the Financial Industry Regulatory Authority (FINRA).
Barclays' bonus practices have been under scrutiny recently. In 2023, the bank slashed bonuses by 43% across the board amid declining revenue. Financial News reported earlier this year that Barclays planned to increase bonuses by up to 20% in certain departments as dealmaking showed signs of recovery. Despite these reports, the bank's broader strategy has focused on streamlining its operations and reducing reliance on investment banking revenues.
