By Valentina Za
MILAN (Reuters) -Italy’s largest bank Intesa Sanpaolo said it would save 500 million euros ($539 million) in staff costs starting from 2028 after reaching an agreement with unions to fund an early retirement scheme for 4,000 employees.
The deal Intesa signed late on Wednesday comes days after rival UniCredit negotiated with unions to allow early retirement for 1,000 employees, while committing to hire 500 new staff members in its branches.
Italy’s top two banks are moving to cut their workforce in anticipation of increasing digitisation of their operations.
Technology advances are driving changes in banking globally, with artificial intelligence sharply reducing the need for staff dedicated to back-office functions.
Intesa, which is spearheading the transition to a cloud-based core banking infrastructure among Italian lenders, will cut around 7% of its workforce under a set of measures it announced late on Wednesday, Reuters calculations based on the unions’ data showed.
Its employees in Italy, its main market, are set to fall to 65,000 from around 70,000 at present, Italy’s main banking union FABI said. Employees currently total 93,800 globally.
Intesa will spread out the early retirements through 2027 and hire 2,000 staff to replace half of the people leaving, FABI added.
The bank said it would cut another 3,000 positions in Italy and 2,000 at its foreign subsidiaries by the end of 2027 by not replacing people who get to pension age or change job.
The positions being cut at the foreign units will all be in central functions, without affecting branch staff, Intesa said.
“With today’s accord we’ve provided initial answers to help workers facing the digital transformation that will reshape banking in the coming years,” said Paolo Citterio, FABI representative within the Intesa group.
Citterio said a new committee had been created to monitor the impact of growing digitisation on Intesa’s operations.
Having budgeted 5 billion euros in 2022-2025 for technology investments, Intesa last year launched a digital-only bank whose cloud infrastructure it plans to extend to the entire group.
With technology allowing banks to automate processes which used to require manual labour, lenders can focus their resources on relations with customers.
In Italy, Intesa will hire another 1,500 people on “hybrid” contracts, meaning they will work part time directly for the bank and as consultants the rest of the time, according to FABI.
The 1,500 new hires will be dedicated to boosting sales of wealth management and insurance products across Intesa’s branch network.
Intesa will book a net charge of around 350 million euros in the fourth quarter to fund the voluntary exits, with no impact on its 2024 net profit goal of more than 8.5 billion euros.
($1 = 0.9273 euros)
(Reporting by Valentina Za; editing by Alvise Armellini, Lisa Shumaker and Jane Merriman)
