Spain’s CaixaBank planning over 8,000 job cuts in banking’s biggest staff reduction

The move, described as “savage” by the unions, would also close 1,534 branches following the lender’s merger with Bankia

Workers putting up a CaixaBank sign at Bankia headquarters in Madrid's Puerta de Europa towers following the merger.
Workers putting up a CaixaBank sign at Bankia headquarters in Madrid's Puerta de Europa towers following the merger.Víctor Sainz

CaixaBank, Spain’s largest domestic retail bank following its merger with Bankia, is planning to axe 8,291 jobs in the biggest ever staff reduction in the Spanish banking sector, and the third largest in Spain’s corporate history.

Management on Tuesday informed union leaders about its plans to reduce employee numbers by 18.7% to 36,109, down from 44,000. Additionally, over 1,500 branches representing 27% of the total will be closed.

Spain’s finance minister and government spokesperson, María Jesús Montero, on Tuesday said that without the merger, the number of job cuts would be a lot higher. But she also called the plans “bad news” at a time when the government is making “herculean efforts” to preserve jobs through ERTE schemes and avoid the kind of unemployment figures seen during the 2008 crisis.

The adjustments, which affect only CaixaBank España and not the group’s foreign-based units, represent the third-biggest round of job cuts by a company in Spain after those carried out by the telecommunications giant Telefónica and by the automaker Seat. Banco Santander and CaixaBank are the two lenders that have eliminated the most jobs since the financial crisis of 2008.

In a statement, management said the workforce adjustment plan, known in Spain as an ERE, “is based on production and organisational grounds, given the overlaps and synergies derived from the merger and the current market circumstances.” The latter include negative interests rates that are driving down margins and are expected to last until 2025, as well as the digitalization of financial services that reduces the need for physical branches. Unlike BBVA, which in February said it was considering cutting around 3,000 jobs in Spain, CaixaBank has not cited economic reasons for the move, and is expected to post a profit in 2021.

“Forced layoffs”

The lender’s main unions said they oppose the ERE plan entirely. A spokesperson for CC OO called it “a provocation and a lack of respect,” citing poor compensation conditions for outgoing workers. Although the bank statement said the process will be based largely on voluntary redundancies, followed by performance, CC OO called it “forced layoffs.” The other major union, UGT, noted that the cost savings are only being applied to the staff, and used the term “savage” to describe the measure.

The unions, which had been expecting between 6,000 and 8,000 layoffs, are hoping to bring the final number down. At the last shareholders meeting they warned about action if the cuts are not negotiated.

CaixaBank said that only half of all workers who volunteer to leave can be over the age of 50, in order to avoid losing the most experienced employees. The company has also pledged to offer “an outplacement and support plan for all affected people, to facilitate their incorporation into and adaptation to a new job position” elsewhere.

Overall, the Spanish banking sector could shed as many as 15,000 jobs this year. Since 2008 the sector has lost nearly 100,000 employees, or 35% of the total, according to the Bank of Spain. The merger of CaixaBank and Bankia (which was bailed out in 2012) has taken place amid a general consolidation process in the Spanish banking sector as lenders shore up their provisions to deal with the impact of the Covid-19 crisis.

English version by Susana Urra.

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