Italian bank UniCredit CEO quietly axed 7,700 jobs in two years
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Unicredit CEO Andrea Orcel has slimmed down the ranks of top management and cut a workforce he saw as getting in the way of better profitability.
PHOTO: REUTERS
Milan – Soon after UniCredit chief executive Andrea Orcel took the helm of Italy’s second-largest bank two years ago, it was clear he would begin trimming a workforce he saw as getting in the way of better profitability.
The scale of the cuts is becoming clear. The Milan-based bank’s full-time equivalent employees stood at 74,322 at end-March, down about 7,700, or roughly 10 per cent, from the level at the end of the first quarter in 2021, according to filings published on Wednesday.
The lender had never set a public target for the cuts.
UniCredit has a presence in 13 countries and is one of the few true cross-border European banks, a fact that brings complexity that Mr Orcel has worked to control.
Since becoming CEO in April 2021, he has slimmed down the ranks of top management and cut back on the co-head structures that were a legacy of predecessor Jean Pierre Mustier.
The bank has also reduced bureaucracy and back-office duplication, while investing in front-line staff.
UniCredit’s operating costs were down in the first quarter, while revenue increased 18 per cent, “confirming the group’s ability to structurally reduce the cost base while protecting revenue growth”, Mr Orcel said during a conference call on first-quarter earnings on Wednesday.
“This is despite significant inflationary pressure.”
The bank has improved cost and revenue guidance for 2023, but has not given any further details on its future job reduction plans.
The reductions were mostly made in Italy, with 2,900 net cuts, followed by 1,600 net exits in Germany and 1,200 in Austria, the bank said. Over the period, the bank hired about 10,800 people for its network and digital functions.
Last year, UniCredit announced a reduction of the number of staff at international hubs and moved deposit-taking and lending activity handled by representative offices, including in London, Mumbai, Singapore, Beijing, Tokyo, Shanghai and Hong Kong, to core countries in Europe.
The bank also cut staff in Germany and Austria and has rearranged Italian operations under the direct responsibility of the CEO.
In Italy, redundancies were made on a voluntary basis and eased by early retirement and social support policies, while new hires were also made over the period in core businesses. The bank said on Wednesday that it had also hired 200 people for the branch network in the first quarter. BLOOMBERG
