Black Tuesday: Banks on Both Sides of the Atlantic Announce Major Job Cuts
UniCredit, Italy: 8,000 jobs; Bank of Montreal, Canada: 2,300 jobs
On Tuesday, December 3, Unicredit, Italy’s largest lender, said it planned to cut 8,000 bank jobs as part of a strategic, four-year restructuring plan. Moreover, the bank said it would end up closing 500 branches as a part of that plan, which would lead to a saving of € 1 billion in costs.
The same day, the Bank of Montréal announced the deepest job cuts in the Canadian banking industry in years. It said it would cut 5% of its workforce, or about 2,300 jobs, in a drive to improve the bank’s operating efficiency.
What’s happening to global banks, and why are they shedding jobs as if there’s no tomorrow?
According to an analysis by Bloomberg, after Tuesday, the global tally of layoffs at banks has topped 75,000.
It’s a sobering fact, but Europe accounts for 83% of that estimate.
Europe’s economy has been a victim of global trade disputes. Its banks have been reeling from negative interest rates and weak investment banking revenues. As a result, European banks have been on a seemingly never-ending path of cost-cutting, restructuring, and fire sales of assets/businesses.
Deutsche Bank (18,000 jobs cut) and UniCredit (8,000) account for the biggest cuts within Europe. Santander, Commerzbank, and HSBC cut by 4000-5000 jobs each. Barclays, Alfa-Bank JSC, KBC, SocGen, and Caixabank bring up the rear with 2000-3000 cuts each.
However, the figure for HSBC may go up by 10,000 according to reports in October. According to analysts at Jefferies at the time, the cuts may have more to do with operating efficiencies.
“That the headcount reduction appears to major on Europe should come as no surprise as this is where the inefficiency versus peers is in our view,” Jefferies said in a note to clients.
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