Societe Generale plans to cut about 900 jobs at its French headquarters as part of Chief Executive Slawomir Krupa’s plan to cut costs and strengthen the capital position. The layoffs make up about 5% of the workforce at the Paris-based lender’s headquarters, SocGen said in a statement. The plan will prevent forced redundancies, and consultations with unions are expected to be finalized in the second quarter.
Societe Generale joins banks around the world looking to cut staff as the stimulus from rising interest rates begins to fade. Last week, Deutsche Bank announced plans to cut 3,500 jobs. In the US, Citigroup said it would cut 20,000 jobs after Chief Executive Jane Fraser pushed the bank into its biggest restructuring in decades.
SocGen has about 52,000 employees in France and 112,000 worldwide, according to its report for the first half of 2023.
Krupa is committed to cutting costs by 1.7 billion euros by 2026 and bringing the company’s cost-to-profit ratio below 60% to support the lender’s capital strength. His strategy, announced in September, sparked a sell-off in shares at the time as he also slashed the profitability, growth and dividend targets set by his predecessor Frederic Udea.
SocGen’s books are down 16% over the past 12 months.
While the bank expects to save €600m by making its IT systems more efficient, it also plans to simplify the organisation. Ongoing projects such as the merger of local retail banking divisions or the integration of Leaseplan into its car leasing division Ayvens, formerly ALD, are also expected to improve efficiency.
Former chief executive Udea announced thousands of job cuts during his 15 years at the helm of the bank. Successive rounds of layoffs have weighed on corporate morale, and Krupa has so far failed to restore it. An internal poll from late last year showed that employees’ faith in senior management’s decisions had declined compared to a previous poll, with only 53 percent saying they had faith in the choices made.
The lender is expected to announce its results for the fourth quarter of 2023 on February 8.
