Barclays Plc is to cut about 1,000 UK jobs as it stops offering financial planning advice in its branches, in further evidence the bank is sharpening the knife on areas of sluggish profitability.

Barclays said on Wednesday the job cuts will fall across the country from February 18, as it focuses its investment service advice on online customers.

Rob MacGregor, from trade union Unite, said the cuts were a warning that the private sector will not fill the gap left by the slashing of jobs in our public services.

Barclays said providing advice through branches was becoming less commercially viable, and it was unlikely the business would be able to deliver a return that would justify the investment required.

New Barclays Chief Executive Bob Diamond is intensifying scrutiny on returns across his bank and is expected to unveil more shifts in focus with the release of 2010 results on February 15.

More stringent capital rules are forcing banks to rethink strategy, and Barclays and others are expected to shrink businesses that require them to hold more capital.

Diamond, who took over as CEO at the start of the year, is holding weekly meetings focusing on where returns do not stack up, sources have said. That is likely to see him scale back areas that struggle to meet the cost of capital, which was 12.5 percent across the bank in 2009.

The bank is also in talks to sell its commercial mortgage unit Barclays Capital Mortgage Servicing Limited, Thomson Reuters publication IFR reported on Tuesday.

Barclays Capital, the investment bank arm that Diamond previously ran, cut 200 jobs in Britain and more overseas earlier this month after a review following an industry slowdown, a person familiar with the matter said.

BarCap could further reduce its fixed income activity and continue to build up in equities and advisory, which are less capital-intensive, analysts reckon.

Barclays was also hit with the second big fine in two weeks by Britain's financial watchdog on Wednesday. It was fined 1.1 million pounds after BarCap breached rules on handling client money.

(Additional reporting by Sudip Kar-Gupta and IFR Markets Reporter Jean Marc Poilpre; Editing by Louise Heavens and David Cowell)

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