January 20, 2021

2020 review: 10 largest bank job cuts this year

This year has not been good on the bottom line of financial services firms. Unfortunately, when cost-cutting exercises are put into place it’s often employees who feel the brunt of these changes.

Photo by Marten Bjork on Unsplash

Banks have unveiled job cuts in the tens of thousands this year

Whether due to a digital transformation, in reaction to COVID-19, or as part of consolidation, several banks have announced job reductions totalling the tens of thousands.

Here are the largest layoffs we’ve seen this year during a year of turmoil.

10. HSBC to cut up to 300 jobs in UK commercial banking unit

A source familiar with the matter told Reuters this year that HSBC is restricting its commercial banking business in the UK.

HSBC is seeking to reduce costs globally in an environment where increasing revenues has proved difficult.

“In line with the group strategy announced in February, we continue to restructure and review the roles required to transform the bank,” says a spokesman for HSBC.

9. Virgin Money slashes 400 jobs following government grant

Virgin’s reduction is part of a 16% cut in the firm’s headcount, a legacy from its merger with Clydesdale and Yorkshire Banking Group (CYBG).

Virgin announced 300 cuts in July, meaning its total for 2020 stands at 700 jobs terminated.

The firm has said it’s trying to avoid compulsory redundancies where possible.

“We are committed to bringing our operations together under the Virgin Money brand to offer customers a sustainable business which is fit for the future,” says Lucy Dimes, Virgin Money’s chief strategy and transformation officer.

8. Lloyds Banking Group cuts 780 jobs across its branch network

Lloyds posted a 26% dip in pre-tax profits following a surge in payouts to customers affected by the payment protection insurance (PPI) scandal. It paid more than £2.5 billion over the course of 2019.

In terms of its infrastructure, the banking group announced in January that it would be closing 56 branches throughout 2020, blaming “changing customer behaviours” at the time.

Between April and October 2020, 31 Lloyds branches will be shut, as well as 10 of the group’s Halifax branches and 15 of the group’s Bank of Scotland branches.

Lloyds Banking Group has closed around 655 branches since 2010.

7. Wells Fargo cuts 700 jobs, overhauls exec suite

Wells Fargo revealed in February that it would be cutting roles among its Philippines operations.

The job cuts, first reported by Bloomberg, saw “a portion” of roles move to India where the bank already houses roughly 12,000 tech employees.

The changes to leadership saw CEO Charles Scharf split the bank’s three existing business units into five.

Well’s commercial operations were split down the middle. One unit focused on branches and small businesses, whilst the other rests its expertise on consumer lending.

6. ING pumps brakes on digital banking plans, plans 1,000 job cuts

ING announced a dramatic about-face in November after posting a 41.4% drop in net profits.

Maggie, ING’s project creating a standardised customer experience across in four European countries, is to be “considerably reduced”.

In an investor presentation, ING described the cross-border integration at the heart of the programme as “discontinued”.

The switch of strategy has cost ING €140 million and a potential 1,000 employees.

5. Barclays make cuts affecting more than 1,000 staff

UK bank Barclays announced in March its intention to close its office in Leeds, costing 800 jobs. The bank then placed a further 340 staff on notice for cuts or relocation.

“In order to drive collaboration, Barclays is moving teams closer together at our UK sites in Glasgow, Greater Manchester and Northampton,” the bank wrote.

“This will enable us to innovate at pace for the customers and clients we serve. We will do everything we can to support colleagues impacted by the changes announced today.”

Trade union Unite claimed the Leeds office shut down due to a landlord’s plans to turn the location over to housing developers.

4. Lloyds plans 1,040 job cuts to back office support staff

Lloyds makes its second appearance on this list with a November notice clearing out back office support staff.

The roles lost are grouped around the bank’s technology and retail operations. Lloyds says that this fresh round of cuts is offset by the creation of 340 new roles elsewhere.

The bank says the changes reflect its “ongoing plans to continue to meet our customers’ changing needs”.

It adds that it needs to make parts of its business “simpler”.

3. UniCredit outlines 6,000 job cuts and 450 branch closures in cost-cutting plan

Italian bank UniCredit got on with its 2019-announced cost cutting scheme by announcing 6,000 job losses and 450 branch closes.

In a union letter, the Italian bank said that it will be making redundancies through early retirements in a “socially responsible way”.

UniCredit CEO, Jean Pierre Mustier, said last year that the bank’s three-year plan would increase stakeholder value by €16 billion ($17.7 billion).

Since 2014 the bank has cut around 20,000 jobs, 14,000 of which has occurred during Mustier’s time at the top.

UniCredit aims to become a paperless retail bank by the end of 2020 in its home country, and do the same in Germany and Austria in 2021.

2. Commerzbank plans 10,000 job cuts as CEO and chairman step down

German lender Commerzbank is undergoing a major shakeup of its internal structure at the behest of vocal shareholders.

CEO, Martin Zielke, and chairman, Stefan Schmittmann, stepped down from their roles at the top of the German bank in July.

Major stakeholder Cerberus claimed Commerzbank’s management focused on unprofitable growth. It also hinted at a potential shareholder revolt.

The equity firm demanded two seats on the board and the cutting of 7,000 jobs. Commerzbank refused its demands.

The German lender announced its acceptance of Zielke and Schmittmann’s resignations a few days later.

1. HSBC to cut 35,000 jobs in a major restructure to boost returns

HSBC unveiled a major structure overhaul at the start of the year.

The bank said it aimed to shed a colossal $100 billion in assets. It also announced plans to shrink its investment bank and revamp its US and European businesses.

HSBC will merge its private banking and wealth businesses. Also in the firing line are its European stock trading and its US retail branches.

The bank told Reuters that the restructuring will result in its current 235,000 headcount going down to roughly 200,000, losing 15% of its workforce and see one in seven jobs lost globally.

In a bid to improve its returns by 2020, HSBC highlighted the need to focus on where the bulk of its revenues are coming from.

That means its retail banking and wealth management divisions, which serves 38 million customers worldwide, and all its businesses in Asia.