Copenhagen-based Danske Bank (CPH: DANSKE), a major retail bank with more than 5 million retail customers, recently laid off 257 workers and finalized voluntary redundancy terms with another 261 employees as part of the banking service provider’s 2-year strategic overhaul of operations.
The recently announced layoffs and the voluntary redundancy agreements are reportedly a part of the discontinuation of around 1,600 jobs over a 6-12 month time period that began in October 2020.
Karsten Breum, Head of HR at Danske Bank, stated:
“We are undertaking a major transformation to adapt to the structural changes that are happening in the financial sector. That requires us to reduce costs significantly, and sadly, we cannot avoid layoffs in this connection. We continue to look at all cost types and other measures to reduce the number of layoffs necessary.”
Of the 257 positions that have been discontinued at Danske Bank, 155 were based in Denmark, 26 were from Norway, 35 in Sweden, and another 41 based in Finland.
It’s worth noting that Danske Bank has joined many other major financial institutions that have also laid off their workers and shut down physical branch locations following the COVID-19 outbreak.
As reported recently, Banco Santander S.A. (Santander Group) (BME:SAN), the world’s 16th-largest banking institution and financial services company based in Madrid, has been focused on cost-cutting measures in order to deal with the economic challenges created by the Coronavirus crisis.
Banco Santander along with other Spanish lenders are struggling to cope with extremely low-interest rates in the eurozone and also a gradual shift by consumers to online or digital banking platforms.
On November 13, 2020, Santander bank’s management decided they would cut around 4,000 jobs (about 14% of its total workforce in Spain, its main market). Santander is also closing down as many as 1,000 physical branch locations or approximately 32% of its offices based in Spain, according to sources familiar with the matter.
European banking institutions have been focused on making significant cost cuts and have also tried to partner with other service providers on various initiatives to further bring down operational expenses.
Caixabank (BME: CABK) has recently confirmed a €4.3 billion (appr. $5.1 billion) acquisition of its competitor Bankia BKIA.MC. The deal may lead to thousands of job cuts after it’s finalized.
Banks around the globe have been struggling to maintain operations due to really low-interest rates following the Coronavirus outbreak. Many more consumers now prefer to use all-digital banking services, especially in a post COVID world.
As reported recently, the Bank of India has postponed its plans to launch new physical branches as more consumers are using digital banking platforms.