Barclays Faces Backlash, Potential Legal Challenges Over Termination of 50 Wall Street Employees

Just weeks before the holiday season, UK-based bank Barclays has sparked outrage among its New York-based staff by terminating 15 bankers and traders, along with 35 other employees, without issuing their annual bonuses. The move has left dozens of professionals reeling as they missed out on year-end bonuses that can reach up to $1 million.

Industry insiders say that termination of benefits like these is uncommon, with many firms offering partial or pro-rata bonuses to departing staff late in the year. "This decision by Barclays is heartless," said attorney Tanvir Rahman of Filippatos. "Bonuses are a vital component of investment bankers' earnings, and erasing them without warning is unacceptable."

Rival firms such as Goldman Sachs and Bank of America reportedly offer more generous severance packages to departing employees, fueling further resentment among those affected.

Several of the terminated employees are considering lawsuits over bonuses worth potentially millions, sparking concerns about the bank's compliance with employment laws. However, Rahman noted that employment agreements typically specify that only currently employed staff are eligible for bonuses, making a claim likely "a long shot".

Ex-employees are also exploring arbitration through the Financial Industry Regulatory Authority (FINRA) to resolve disputes.

In response to criticism, Barclays released a statement saying they regularly review their talent pool to invest in talent and drive success. The decision is part of a three-year strategy to reduce the bank's investment banking dependence and streamline operations.

Despite this move, reports emerged that bonuses for select departments were expected to increase by 20% due to a recovery in dealmaking activity.

This termination has left numerous emotions running high among affected employees and broader Wall Street circles. With legal challenges potentially on the horizon, Barclays' move has highlighted the delicate balance between cost-cutting measures and workforce morale.

The move also sparks concerns over maintaining morale at large financial institutions, where disputes are not uncommon.

This news comes in line with a larger trend of tightening bonus payouts for several major banks, first seen last year when numerous bankers went without bonuses altogether.