Big Banks Cutting Tens Of Thousands Of Jobs; Huge Implications
by John Rubino
September 15, 2015
Money center banks — which over the past few decades have grown into the biggest financial entities the world has ever seen — appear to have hit a wall, and are now shedding tens of thousands of workers. Three recent examples:
Barclays plans to cut more than 30,000 jobs
(CNBC) – Barclays plans to cut more than 30,000 jobs within two years after firing Chief Executive Antony Jenkins this month, The Times reported on Sunday.
This redundancy program, which could reduce the bank’s global workforce below 100,000 by 2017 end, is considered as the only way to address the bank’s chronic underperformance and double its share price, the newspaper said, citing senior sources.
These job cuts are likely to affect staff at middle and back office operations, where largest savings are achieved, the Times said.
The paper said that a potential candidate, who would replace Jenkins, is expected to ax jobs much faster and more deeply than the ousted boss.
Deutsche Bank to cut workforce by a quarter
(Reuters) – Deutsche Bank aims to cut roughly 23,000 jobs, or about one quarter of total staff, through layoffs mainly in technology activities and by spinning off its PostBank division, financial sources said on Monday.
That would bring the group’s workforce down to around 75,000 full-time positions under a reorganization being finalised by new Chief Executive John Cryan, who took control of Germany’s biggest bank in July with the promise to cut costs.
Deutsche’s share price has suffered badly under stalled reforms and rising costs on top of fines and settlements that have pushed the bank down to the bottom of the valuation rankings of global investment banks. It has a price-book ratio of around 0.5, according to ThomsonReuters data.
Deutsche is mainly reviewing cuts to the parts of its technology and back office operations that process transactions and work orders for staff who deal with clients.
A significant number of the roughly 20,000 positions in that area will be reviewed for possible cuts, a financial source said. Back-office jobs in the group’s large investment banking division will be concentrated in London, New York and Frankfurt, the source said.
PostBank has about 15,000 positions, pointing to roughly 8,000 layoffs at Deutsche once the unit’s spinoff is completed as planned in 2016.
UniCredit plans to cut around 10,000 jobs
(Reuters) – UniCredit (CRDI.MI), Italy’s biggest bank by assets, is planning to cut around 10,000 jobs, or 7 percent of its workforce, as it seeks to slash costs and boost profits, a source at the bank told Reuters on Monday.
The planned cuts will be concentrated in Italy, Germany and Austria, several sources said, adding that they include 2,700 layoffs in Italy that have already been announced.
A UniCredit spokesman declined comment beyond noting that the bank’s CEO Federico Ghizzoni had on Sept. 3 said there were no concrete numbers on potential lay-offs, after a report said it was considering eliminating 10,000 positions in coming years.
UniCredit, which has 146,600 employees across 17 countries, is under pressure to boost its profits as low interest rates are expected to keep hurting its earnings in coming years.