This is not the first time Barclays have effectivly fired and re-hired contractors at a lower rate. They did it in 2002 after 911. I was in a gap (really a gap, no-one was wanting to take on IT contractors) when they cut contractor rates by 25%.
I was desperate enough, after 5 months of looking for roles, to accept a contract back at Barclays at more than 30% below the rate I had been working earlier in the year.
And before any more people jump on the "greedy contractors" bandwagon, it's not nearly as lucrative as it used to be, because HMRC are much more interested in making sure that you pay the employees' Tax and NI, as well as the employers NI. All in all, I end up having less than half of the money that my company is paid available as 'take home' pay. Contrast this with the benefits of a favorable pension scheme, sickpay, and holiday that all permies expect, and contractors are not so much better off. I admit do take home more than if I went back to a permanent role, but I also have the uncertainity of not getting a contract at the end of my current one, and no possibillity of a redundancy package. And it's not like I can sign on without shutting down the limited company I am forced to setup.
Barclays have asymetric notice periods for contractors (4 weeks them to you, contractors not able to get out of a contract before it ends), and this appears to be pretty common (my current contract allows the client to kick me out with just a weeks notice, whereas I have to give 4).
Still, I have some pity for my ex-collegues in Knutsford (Radbroke Hall is the name of the Barclays campus there), especially any who had moved up from Poole after that location was announced to be closing, and who still face job uncertainty.
BTW. It's noticible that the Barclays employment practices really changed when the Board became populated by high-flyers from the US.