UniCredit Reaches Deal With Unions on 5,200 Italy Job Cuts

(Bloomberg) -- UniCredit SpA reached an agreement with workers to cut 5,200 existing jobs in Italy through 2023 as the bank presses ahead with its plan to improve efficiency amid the coronavirus outbreak.

The exits are all on voluntary basis through attrition and voluntary redundancies, UniCredit said in a statement. In addition, the lender agreed to hire about 2,600 younger workers, halving the net number of staff reductions.

The Milan-based bank wrapped up weeks of negotiations over an initial target of 6,000 reductions, agreeing to relocate 800 workers targeted for the exit, said Mauro Morelli, a representative of the FABI union.

While European banks including HSBC Holdings Plc and UBS Group AG have said they will suspend job cuts in response to the coronavirus, UniCredit has continued to move forward with reductions that are key to Chief Executive Officer Jean Pierre Mustier’s strategic plan.

The four-year plan, announced in December called for about 8,000 job cuts across countries where the bank operates, or more than 9% of the total workforce.

With the conclusion of employee agreements in Italy, Germany and Austria, the bank’s job targets of its business plan “have been met,” UniCredit said.

The lender has cut about 14,000 jobs since Mustier took over in 2016. UniCredit joined European lenders in suspending dividend payments on 2019 earnings, bowing to European Central Bank pressure to retain capital amid the coronavirus turmoil.

That’s a setback for the CEO’s goal to boost shareholder payouts over the course of the strategic plan. Mustier is focusing on accelerating a cleanup of the bank’s balance sheet and simplifying its structure to improve investor returns.

As part of the accord with unions, UniCredit agreed to keep its headquarters in Italy and to not start new initiatives to cut jobs, over the course of its strategic plan, unions said.

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