Spain’s Banco Popular Reaches Union Agreement for 2,592 Job Cuts

(Bloomberg) -- Banco Popular Espanol SA said it reached an agreement with union representatives to reduce its workforce by 2,592 employees as Chief Executive Officer Pedro Larena presses ahead with a business overhaul.

The cuts will cost about 375 million euros ($417 million) and eventually yield annual savings of 175 million euros to 200 million euros, the Madrid-based lender said Sunday.

Popular signaled plans in September to cut as many as 3,000 jobs while closing about 300 branches out of its network of more than 2,000. The company has said it’s seeking to improve profitability and efficiency after unveiling a 2.5 billion-euro fundraising in May to purge real estate from its balance sheet. The stock has slumped 66 percent this year, the worst decline in Spain’s benchmark IBEX 35 stock index.

Banco Santander SA, Spain’s largest lender, earlier this year announced the closure of hundreds of branches as it cut jobs in its home market.

--With assistance from Esteban Duarte and Charles Penty To contact the reporters on this story: David Scheer in in Seattle at dscheer@bloomberg.net, Eduardo Thomson in Santiago at ethomson1@bloomberg.net. To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Sylvia Wier