A History of Deep Cuts and Restructuring Barclays has certainly weathered its fair share of corporate storms. Years ago, the banking giant was forced to axe at least 3,700 roles across its retail and investment divisions following a staggering 96 per cent plunge in annual pre-tax profits, which plummeted to £246 million from £5.9 billion. Stripping out hefty fines, compensation payouts, and debt revaluation, the underlying picture actually showed a 26 per cent rise in adjusted profits to £7.05 billion.
Driving this massive restructuring was former Chief Executive Antony Jenkins. Having notably waived his bonus during the turbulent period, he spearheaded a strategic review aiming to slash overall costs by £1.7 billion by 2015. A key part of this corporate cleanup involved shutting down the bank’s highly lucrative but deeply controversial Structured Capital Markets tax advisory unit. This was a direct attempt to salvage a reputation battered by an industry-wide culture that Jenkins himself described as too aggressive and entirely disconnected from the needs of society. Job losses hit hard globally, with roughly 1,800 roles slashed in corporate and investment banking, predominantly in Asia, while another 1,900 positions were cut across the European retail and business sectors. The impact on UK operations, however, was kept to a minimum.
Weathering Scandals and Regulatory Scrutiny The backdrop to these severe cuts was a litany of incredibly costly scandals. Barclays found itself deeply entangled in the widespread mis-selling of payment protection insurance (PPI) – a fiasco costing the bank £2.6 billion – alongside controversies over interest rate swaps sold to small businesses. Regulators on both sides of the Atlantic clamped down hard. The bank swallowed a £290 million fine for its part in rigging the LIBOR rate, a crucial benchmark affecting trillions of dollars in global loans and mortgages. Further compounding the misery, the Serious Fraud Office investigated payments made to Qatar Holding during the 2008 financial crash, while US regulators pursued a $470 million penalty over the alleged manipulation of Californian energy markets.
Making Bold Calls in Today’s Market Fast forward to the present day, and Barclays is making headlines not for internal turmoil, but for its heavy-hitting market analysis. The bank’s analysts recently sent shockwaves through the pharmaceutical sector by brutally slashing their sales forecast for Novo Nordisk’s obesity drug, CagriSema. Novo Nordisk had banked heavily on this treatment to fend off fierce competition from US rival Eli Lilly.
Following heavily disappointing Phase 3 clinical trial data, Barclays downgraded the drug’s revenue potential by a massive 80 per cent, dropping it from an initial $12 billion to a mere $2 billion. The market reaction was swift and unforgiving. Shares in the Danish pharma giant went into freefall on the Copenhagen stock exchange, plunging nearly 20 per cent on Monday before shedding a further 2.6 per cent by Tuesday. This weak pipeline data has severely deepened the ongoing crisis for the manufacturer.
The Great Sector Rotation Beyond individual stock downgrades, Barclays’ analysts are navigating a fundamental shift in broader market sentiment. Investors are growing increasingly weary of the volatility and high valuation risks currently associated with technology and artificial intelligence equities. Classic utility companies are instead enjoying a rather unexpected renaissance.
Global electricity demand is structurally surging. According to bodies like the IEA and EIA, this isn’t solely driven by the transition to electric vehicles and heat pumps. The sheer energy appetite of sprawling AI data centres is turning power generation into the foundational infrastructure of the digital age. During uncertain market phases, the spotlight naturally returns to stable cash flows, robust balance sheets, and regulated yields. Utilities are perfectly positioned to deliver on these fronts, offering predictable earnings and solid dividends that high-growth tech stocks simply cannot guarantee right now. After languishing in the shadow of the tech rally for years, companies that blend sheer stability with long-term growth trends like grid expansion and decarbonisation are highly sought after. Highlighting this dramatic shift, our latest special report details three utility stocks that perfectly marry this defensive strength with highly attractive upside potential.
