UK's Barclays bank has said that it is planning to cut the salary of thousands of contract staff by 10 per cent or terminate roles.

The bank informed that contract staff that they will have to accept a 10 per cent pay cut or have their jobs terminated. The bank management wrote a letter to its staff informing them that the new, lower rates would be imposed on all "contingent workers" in the UK and the US from 7 April. The move is a part of the bank's plans to review of its cost base.

The e-mail said that any contractor who does not agree with the new rate should "please accept this communication as notice to terminate your current assignment at Barclays to finish on Friday 4th April 2014 or on your current assignment end date if sooner".

The decision to cut pay comes after it decided to hike its top bankers' bonuses by 10 per cent in the  country. Chief executive Antony Jenkins and the board have approved a hike in bonuses even as the unit's revenues fell. The move might create tensions between the Bank of England and European regulators. Jenkins, the head of the Barclays bank has turned down the bonus offering from the bank for 2013 as the bank faced costs relating to the scandals.

The figures showed that the bank recorded fall in income to £27.9 billion and the underlying profit is lower than consensus forecast of around £5.4 billion. The bank had to set aside £2 billion to its bill for customer mis-selling scandals in the previous year.