Barclaycard cuts 1,100 jobs but increases IT spend

Barclaycard is to axe 1,100 UK jobs over the next three years, but at the same time, it will make £30m worth of investments - most of which will be spent upgrading its IT infrastructure.

The company said the cuts are the result of decisions taken after a review process lasting 18 months. In recent years, the company has faced stiff competition, especially from US companies and UK retailers such as Sainsbury's Bank.

However, Barclaycard reckons the restructuring should allow it to make better use of technology, and maintain its position as the UK's leading card provider. It currently commands about 30 per cent of the market, with about 6.5 million customers and over 9 million cards in circulation.

Bob Potts, Barclaycard chief executive, said: "I very much regret that we will be losing jobs over the next few years, but I am afraid this will be unavoidable as, in the interests of improving customer service and competitiveness, we introduce new, more advanced systems into the business and change many of the processes that we currently have." Barclaycard will still employ over 3,000 staff in six UK cities.

A Barclaycard spokeswoman told Silicon News that the company is already a heavy investor in call centre and smartcard technology, but the overhaul will also focus on "intelligent desktop technology which allows agents to have access to a range of information not previously available".

The spokeswoman said the company's IT staff will not be affected by the losses, most of which will occur through voluntary redundancies and natural personnel movement. "That [IT] part of the operation has been ring-fenced," she said.

Potts said the company will be working with unions to ensure as smooth a transition as possible. However, there are fears within the industry that Barclays Bank, the owner of Barclaycard, will also be forced to shed more jobs after a dismal quarterly loss and exposure to the economic problems in Russia and the Far East.