A few months after acquiring Bankia, banking giant CaixaBank is preparing to lay off 8291 people, or more than 18% of its workforce. This is the biggest restructuring in the history of the Spanish banking sector. Here's what you need to know about the job cuts.
The loss of almost 1 in 5 jobs
Never before has the Spanish banking sector undergone such restructuring. CaixaBank has deemed it "necessary to launch a plan to cut 8,291 jobs", as it stated in a press release.
CaixaBank, Spain's leading bank following its takeover of Bankia in September 2020, explains that this restructuring is due to "the duplications and synergies caused by the merger and current market circumstances".
Low interest rates, growing use of online banking services and the health crisis caused by the Covid-19 pandemic are among the reasons cited by the Spanish banking giant, which will be targeting branches in particular.
As a result, 1,534 branches are to be permanently closed, representing a 27% reduction in the number of branches, with the loss of 5,742 of the 8,291 jobs targeted by CaixaBank.
Restructuring planned for several Spanish banks
BBVA (Banco Bilbao Vizcaya Argentaria), Spain's number 2 bank, has just announced to trade unions its intention to lay off 3,800 people, or 16% of its workforce, according to information reported by the Commissions Ouvrières trade union.
At the end of November 2020, Spain's number 5 bank in the sector, Banco Sabadell, implemented a redundancy plan involving 1,800 positions, based on early retirement and voluntary redundancy.
Santander followed suit at the end of 2020, closing 1,000 branches and cutting 4,000 jobs. The merger between the Unicaja and Liberbank banks will soon result in the closure of 400 branches and the departure of 1,900 employees.
According to Joan Sierra, head of the banking sector for the Commissions Ouvrières trade union, this wave of restructuring in the Spanish banking sector dates back to the 2008 financial crisis.
"Covid may partly influence, due to the poor outlook caused by the pandemic, for example an increase in the risk of non-repayment of loans," he explains. However, Spanish banks didn't wait for the arrival of Covid-19 to make redundancies: almost 100,000 jobs were cut between 2008 and the end of 2019, representing a 37% reduction in headcount compared with 2008.
Since December 2019, the workforce has again been cut by almost 35%, with 97,000 positions eliminated. The number of bank branches has fallen by over 50% since the 2008 financial crisis.