Caixabank plans more than 8,000 job cuts in one of Spain's biggest staff overhauls

MADRID: Caixabank, which has become Spain's largest domestic bank after buying Bankia, is planning to cut nearly a fifth of its workforce and close hundreds of branches in one of the biggest staff overhauls in Spain's corporate history.

The union at Caixabank - Union Comisiones Obreras (CCOO) -was given details of the cost cuts at a meeting, a union spokesman said. Management told the union they wanted to lose 8,291 jobs and close 1,534 branches, about 27% of the bank's offices to adapt to a customer shift towards online banking.

Caixabank confirmed the job cut figure which, based on previous negotiations, can eventually be lower.

The bank said in a statement cuts would take into account overlaps and synergies from the merger and the current market conditions, and would opt for voluntary redundancy as a preferred option and also take into account performance.

In September, Caixabank agreed to buy Bankia for 4.3 billion euros, in a deal underpinned by annual cost savings of 770 million euros by 2023.

Excluding staff at Caixabank's Portuguese business BPI, the bank has around 44,400 workers in its banking business and around 5,639 branches.

HISTORIC LAYOFFS

The cuts at Caixabank follow similar measures taken by other Spanish banks and mark the biggest ever round of job cuts in the industry in Spain and one of the biggest ever in the country's corporate history.

In 1999, Telefonica laid off 10,800 workers, while Bankia was forced to cut 4,500 employees after its state-bailout in 2012.

European banks, under pressure from low interest rates and fallout from the pandemic, are taking different actions to cut costs, either through mergers or on a standalone basis.

Against that backdrop, banks in Spain are boosting efforts to sell services on digital platforms as they try to fend off competition from fintechs.

Since the financial crisis in 2008, the number of bank branches in Spain has fallen by slightly more than 50% up to December last year. Staff numbers have shrunk by almost 97,000, or around 35%, compared with December 2019, based on data from the Bank of Spain.