Barclays is to cut 19,000 jobs by 2016, with about half to go in the UK, the bank has said.
As part of a new strategy, the investment part of the bank will lose about 7,000 jobs by the end of 2016.
Barclays' investment bank has been hit by a slowdown in the demand for government and company debt.
Barclays will also set up a "bad bank" which will eventually sell or run down £115bn of non-core operations.
These include £90bn of investment bank assets and all of its European retail banking operations, amounting to £16bn of assets.
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Retail banking in Spain, Portugal, Italy and France will be shifted to non-core operations.
"Bad banks" have been used by a number of institutions since the global financial crisis as a way of ring-fencing risky loans and assets.
The carve-up will give greater prominence to Barclays' retail operations in the UK, its Barclaycard credit card arm and its African business.
"This is a bold simplification of Barclays," said chief executive Antony Jenkins.
Welcome back retail banking.
Antony Jenkins has finally followed the lead of the Royal Bank of Scotland, UBS and many other global banks in cutting its investment banking activities and focusing on the bread and butter - customer accounts, wealth management, Barclaycard and business lending.
After a plunge in profits in fixed income products (used by companies to finance debt) and commodities trading, Mr Jenkins will focus on the bits of the investment bank that are left on equities and mergers and acquisitions advice. As Pfizer and AstraZeneca shows, deal fever is coming back.
The 5% jump in the share price shows what shareholders think of Mr Jenkins' plan. Fixed income and commodities were simply too expensive and too cyclical for a bank weighed down by the requirement to hold more capital as a buffer against such activities.
Of course, Mr Jenkins will now be tested on execution. The investment bank, once the job losses have gone through, will have to show a better cost to income ratio. The European businesses will need to be run down or sold. The retail bank will have to show continued progress. The new Africa division will need strong management.
Mr Jenkins wants a simpler bank.
Simpler also means there are fewer places to hide if things go wrong.
"We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage."
Job lossesThe majority of the job losses will happen this year, with 14,000 jobs to be cut across the group in 2014.
The number is higher than the 10,000 to 12,000 global jobs that the bank previously said it wanted to cut this year.
Around 8,000 of the 14,000 jobs to go this year will be lost in the UK.
That figure of 14,000 includes more than 2,000 investment bank jobs that will go this year around the world.
Another 5,000 investment bank positions will be lost by 2016.
The investment bank employs around 26,000 people, a spokeswoman said.
The retail banking arm employs 32,900 people in the UK, and around 5,900 in Europe.
Shares riseIn early trading on Thursday, Barclays shares were up over 5%.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said:
"The news has been well received, although this is unquestionably a long term game," he said.
"The separation of non-core assets, a continued reduction of costs and a streamlining and focus on more profitable operations all seem to make strategic sense."
However, the change of direction for Barclays needs to be implemented both quickly and carefully "since investors' patience on the banking sector as a whole is showing signs of wearing thin after some years of rapid change," he added.
In the first quarter of this year, Barclay's profits fell 5%, after its investment banking business was hit by a 28% slump in revenue.
Revenue from trading in currencies, bonds and commodities dropped 41% to £1.23bn.
BBC Business Editor Kamal Ahmed said on Wednesday that Barclays could close up to 400 branches over the next few years, but that an announcement about branch closures was not imminent.
In its statement on Thursday, Barclays made no mention of any retail bank branch closures.
Do you work for Barclays? Are you affected by the job cuts? You can send an email to haveyoursay@bbc.co.uk adding 'Barclays' in the subject line.
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