Fears of a severe job cull at UniCredit emerged this evening, rocking Europe’s banking sector just weeks after rival Deutsche Bank swung the axe on its own staffing operations.
Italy’s largest bank is understood to be weighing up a move to slash 10,000 jobs as part of a new cost-cutting strategy.
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Sources told Bloomberg, which first reported the story, that final numbers are under review but dismissals would involve staff in Italy as well as other countries.
The drastic measure, which would mean a 10 per cent cut to its global workforce, marks the latest cost-cutting drive from Europe’s embattled banking sector, which has been battered by lower interest rates and rising volatility.
Earlier this month German lender Deutsche Bank revealed plans to axe 18,000 jobs across its global offices and shut its loss-making equities business, calling time on its 20-year efforts to rival Wall Street.
David Madden of CMC Markets told City AM that he expected more European banks to follow suit: “Many of the European banks didn’t do enough of a restructuring after the credit crisis. They should’ve been focusing on selling off non-core assets and toxic assets and getting as much cash in the draw as they could.”
Neil Wilson, chief market analyst at Markets.com, added: “I’d say there’s still a lot of problems in Europe’s big banks. They’re guilty of a failure to clear out all the rubbish post 2008, which was something the Americans did right away….And in Italy you still these quite fat operations with too many employees- there’s a lot of fat to cut.”
UniCredit has been eyeing up a potential takeover of Commerzbank as part of its potential future direction, but last month sources told Reuters that the deal had been put on ice as the German lender did not want to enter negotiations so soon after talks collapsed with Deutsche Bank.
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Russ Mould, investment director at AJ Bell, said: “The bank’s reported desire to merge with Germany’s Commerzbank and diversify away from Italy tells investors all they need to know about what UniCredit thinks about the Italian market and its position will not be helped by the latest bout of political uncertainty.”
UniCredit did not respond to a request for comment.