UniCredit to Cut About 6,000 Jobs, 450 Branches in Italy

(Bloomberg) -- UniCredit SpA expects to cut 6,000 jobs and close 450 branches in Italy as Chief Executive Officer Jean Pierre Mustier sets his three year-efficiency plan in motion.

The reductions and closures will take place through 2023, according to a letter sent to unions and seen by Bloomberg News. The Italian redundancies are part of a plan announced in December to cut about 8,000 positions, or more than 9% of the workforce.

The letter was sent to unions to kick off talks over job losses. UniCredit said that it expects to reach an agreement by the end of the first quarter. Mustier has repeatedly said that job cuts will be done through early retirements, in a socially responsible way and in alignment with the group’s workers’ representatives.

Mustier is cutting costs and accelerating the cleanup of the balance sheet as the executive focuses on further simplifying the bank’s structure and improving the way it allocates capital. Since 2014, UniCredit has cut about 20,000 jobs, 14,000 of which took place during Mustier’s tenure.

UniCredit also said in the letter that the macro-economic environment and prolonged negative interest rates will hamper profitability. With revenue that will never return to the levels before the financial crisis, the bank needs to keep cutting expenses and specifically job costs, the bank said.

“Unions are strongly against the job and branch cuts plan,” said Fulvio Furlan, general secretary of Uilca, one of the main banking unions. “Discussions with unions must lead to solutions that limit the job cuts and include a plan of new hirings.”

UniCredit posted a better-than-expected profit in the fourth quarter and boosted a key measure of financial strength. The bank’s strategic plan through 2023 also envisions boosting investor returns through a combination of dividends and share buybacks.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen, Christian Baumgaertel

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