Global Bank Job Cull Tops 75,000 This Year as UniCredit Cuts
(Bloomberg) -- UniCredit SpA’s plan to eliminate 8,000 jobs is pushing cuts announced by banks this year past 75,000, almost all of them in Europe, where negative interest rates and a slowing economy force lenders to slash costs.
Chief Executive Officer Jean Pierre Mustier on Tuesday announced the measures as part of the next, four-year chapter in his overhaul of Italy’s largest bank. They bring the total job cuts disclosed by banks around the world to 75,700, with 83% of that in Europe.
The figures underscore the weakness of European banks as the region’s export-oriented economy is rocked by international trade disputes while negative interest rates eat further into lending revenue. Unlike in the U.S., where government programs and rising rates helped lenders rebound quickly after the financial crisis, banks in Europe are still struggling to regain their footing. Many are firing staff and selling businesses to shore up profitability. UniCredit says its next round of job cuts will help eliminate 1 billion euros ($1.11 billion) of gross expenses.
Banks from Germany, the most-fragmented major banking market in Europe, top the list of job cuts. Deutsche Bank AG is planning to get rid of 18,000 employees through 2022 as it retreats from a big part of its investment banking business. UniCredit’s announcement adds to the thousands of positions that will go at banks from other European countries as they seek to shore up profitability.
But European banks aren’t alone in firing staff to bolster returns. Bank of Montreal said on Tuesday that it’s cutting 5% of its workforce, or about 2,300 positions. The most dramatic job cuts by a Canadian bank in more than 15 years are part of efforts to improve operating efficiency, according to CEO Darryl White.
It isn’t all gloom, though, as firms seek to add jobs to update their technology and improve compliance. UniCredit says it will spend 9.4 billion euros on its information technology over the coming four years, including on human resources.
©2019 Bloomberg L.P.