The Restructuring Of Caixabank Could Lead To The Largest Redundancy Scheme In The History Of Spanish Banking Sector

Caixabank has very efficient cost structuresCaixabank's headquarters

The Catalan bank has informed the trade unions of the adjustment resulting from the merger with Bankia. The plan, in principle, includes the lay-off of 8,291 workers, 18% of the group’s workforce in our country. However, the final figure could be lower depending on the negotiations that began last week. The redundancy programme would be the largest in the history of the banking sector in Spain. Until now, the most significant restructuring plan in the Spanish financial industry was carried out by Bankia in 2013 and affected 4,500 workers.

In addition, management has announced its intention to close 1,534 branches, i.e. 27% of the network.

The bank also announced it would incur restructuring costs of 2.4 billion euros before taxes, with the aim of reducing the efficiency ratio to below 48%.

BBVA also announced this month that it will begin a process of redundancies in Spain. This will affect both central services and the commercial network, in the current context of low profitability for the financial sector due to low interest rates and the impact of the coronavirus pandemic. Although the entity did not specifed the number of possible redundancies, the press has estimated a figure of 3,000.

CaixaBank’s management explained that one of the criteria to be applied in the lay-off scheme will be “voluntary,” although “always taking as a maximum limit the quota of employees identified as surplus in each territory or functional area and establishing measures to avoid generational imbalance.” For this reason, they are considering that the percentage of workers over 50 years of age who voluntarily join the redundancy plan may not exceed 50% of the total number of people leaving the company.

The other criterion will be “meritocracy,” as previously announced.

Trade union UGT described the programme proposed by CaixaBank as “wild and shameful,” stating that the bank intends to “pay the bill for the merger and the pandemic at the expense of the workforce”. They also said the measures proposed by the bank makes “voluntary redundancies unfeasible,” leading to forced redundancies.