Job cuts announced by European banks tumble in 2016

Thu Dec 15, 2016 8:27am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Ritvik Carvalho and Anjuli Davies

LONDON (Reuters) - Job cuts announced by European banks have tumbled in 2016, as they work through a backlog of layoffs unveiled in previous years and struggle to find new areas where they can trim staff without threatening profitable operations.

Some industry watchers say lenders might even recruit a little next year overall, provided the market rally following Donald Trump's U.S. presidential election victory continues, although banks themselves are looking to joint ventures with rivals to cut costs further - signaling more layoffs.

On Tuesday, UniCredit (CRDI.MI: Quote) said it plans to cut 14,000 jobs by 2019, bringing the total number of layoffs announced by 17 major banks in Europe this year to just under 50,000, according to analysis by Reuters.

But in the second half of 2015 alone, the number of announced job losses was 130,000, with culls at HSBC (HSBA.L: Quote), Standard Chartered (STAN.L: Quote), Deutsche Bank (DBKGn.DE: Quote) and Credit Suisse (CSGN.S: Quote) among others.

Widely seen to be lagging their American counterparts in an era of low interest rates and tight regulation, European banks have implemented major restructurings since 2011 in an attempt to boost profits and stay competitive.

This year the cuts at UniCredit, along with layoffs at Commerzbank (CBKG.DE: Quote), ING Groep (INGA.AS: Quote) and more at Credit Suisse, accounted for over 25,000 of the announced job losses.

However, other banks held back despite their repeated emphasis that low profit margins caused by low or negative interest rates and new regulations imposed on the industry since the global financial crisis mean they need to slash costs.

That's because many are still implementing previously announced reductions, as well as finding they are running out of areas where they can easily lay off staff, having slashed their numbers in retail and investment banking.   Continued...

FILE PHOTO: Storm clouds are seen above the Canary Wharf financial district in London, Britain, August 3, 2010.  REUTERS/Greg Bos/File Photo