UniCredit has become the latest European lender to resort to cost cutting measures in what has been billed as a down year for banking across the continent. At the epicenter of this phenomenon have been London-based lenders, which have jettisoned thousands of jobs in a bid to help stimulate profits and sagging revenues.
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UniCredit is the largest Italian lender, and like many other European banks it has experienced a somewhat poor year in terms of its financials and revenues. For over the past year, many leading banks such as Deutsche Bank, Standard Chartered, and others have embarked on ambitious cost-cutting measures. In most instances this has seen the losses of thousands of IT and back office jobs.
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With the rising cost of labor in the UK and continental Europe, banks have routinely been cutting staff to relocate personnel to Southeast Asia or other locales. The cuts have not been confined to only lower level individuals however, as many banks have consolidated or cut their foreign exchange (FX) or fixed income desks.
14,000 Job Cuts by 2019
UniCredit will be undergoing a somewhat different plan, and while it is slated to cut 6,500 jobs, or up to 14,000 by 2019, the bank will also be investing billions in digitization. The job cuts themselves are estimated to generate nearly $1.81 billion in annual savings.
Consequently, the cuts will see the closure of hundreds of branches with up to $1.7 billion being injected into other IT investments such as digitization activities as the bank transitions to a more mobile focused strategy. In addition to other realized savings, the overall moves
According to UniCredit’s CEO Jean Pierre Mustier in a recent statement on the cuts: “We have developed a pragmatic plan based on conservative assumptions, with tangible and achievable targets, dependent on cost and risk management, levers which are firmly under our own control.”