UniCredit Set to Slash Jobs in Hubs From New York to Tokyo
UniCredit Set to Slash Jobs in Hubs From New York to Tokyo
(Bloomberg) -- UniCredit SpA is planning to cut the number of staff at international hubs like New York and Tokyo, as part of Chief Executive Officer Andrea Orcel’s drive to simplify the company and focus its strategy on growth closer to home.
The Milan-based bank will move deposit-taking and lending activity currently handled by representative offices including London, Mumbai, Singapore, Beijing, Tokyo, Shanghai and Hong Kong to core countries in Europe, people with knowledge of the matter said. The bank is set to outline a fresh strategy on Dec. 9.
A significant number of the roughly 700 positions at those locations will be cut, with some staff being relocated, said the people, who asked not to be named as the matter isn’t public. The New York office will remain the sole non-core location where client business is booked, the people said.
A spokesman for UniCredit declined to comment.
The changes are “positive as they allow the bank to focus on core countries,” said Fabrizio Bernardi, an analyst at Bestinver. “We expect bold, transformational moves from Orcel as a plain-vanilla business plan would be useless for the stock’s rating.”
UniCredit shares pared some early trading losses and are down 0.4% at 11.58 euros as of 2:55 p.m.
Orcel is readying the stage for a strategic pivot to higher organic growth now that six months of negotiations to take over the remains of Banca Monte dei Paschi di Siena SpA have fallen through. Since taking over in mid-April, the former UBS Group AG investment banker has reorganized regional businesses and reshuffled top executives in a campaign to reduce complexity and move away from an era of restructuring under his predecessor.
As part of the plan the bank will centralize the trading activities in Milan, and Treasury activities will be split between Milan and Munich, the people said. UniCredit is reducing staff in the U.K. and moving most of its London-based trading staff to Milan, Bloomberg reported last month. It’s also considering moving some of its Munich-based traders to its Italian headquarters.
UniCredit’s core markets consist of Italy, Germany and countries in central- and eastern Europe.
Orcel has signaled that the core of the strategy review is to generate higher sustainable average returns. The lender posted higher-than-expected third-quarter profit aided by lower provisions for bad loans and rising earnings from fees and commissions.
As European lenders begin to look toward the end of the coronavirus pandemic, an increasing number are mulling their overall strategy. Deutsche Bank AG, UBS and BNP Paribas SA are among lenders due to give an update in the coming months.
©2021 Bloomberg L.P.
