Japanese investment giant Mizuho is the latest bank to embark on an ambitious cost-cutting strategy, publicizing a long-term plan that will see thousands of jobs cut. The cuts will help streamline a number of targeted segments at Mizuho, with its high street branches being the hardest hit.
Big banks have largely been towing a similar line over the past few years, with European lenders such as Deutsche Bank, Standard Chartered, and others seeing myriad job cuts. In a bid to help restore profitability and placate unhappy shareholders, many banks have opted to incur large numbers of cuts that have had a mixed effect to date.
On its part, the Japanese financial services giant outlined a ten-year blueprint that will see the scaling back of its branch network. The decision is largely the product of a more digitized strategy seen across the banking sector as a whole, with traditional banking branch jobs being cut en masse.
Moving forward, Mizuho seems to be pursuing a similar course as other lenders, i.e. relying on more low-cost technology to help steer its business and displace more costly legacy systems and models.
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Presently, Mizuho boasts a global workforce of 79,000 positions, though it is eyeing a figure of just 60,000 by 2027, or 24 percent less over the next ten years. The biggest source of cuts will take place in its high street branches, including 100 locations from its overall network of 500 branches. Additionally, the group’s IT capabilities will see dramatic restructuring during this process, though no concrete figures were disclosed at this time.
The ambitious plan was revealed during Mizuho’s Q2 financial results. Furthermore, the group sees headwinds remaining and an increasingly difficult and competitive business environment, which is prompting the move.
“While the One Mizuho strategy focusing on meeting customer needs is performing well, Mizuho’s earnings are experiencing a declining trend. Reinforcement of expense control and earning power are necessary,” noted the bank.
This stance was echoed by Mizuho’s CEO Yasuhiro Sato, who was “very alarmed by the prospect of new entrants overrunning traditional banking operations like remittances and payments.”
Of note, the new cost-cutting plan globally follows after months of aggressive expansion in Mizuho’s America’s unit. The subsidiary has seen a number of marquee hires since its installment, while also inking several fintech partnerships.