UniCredit confirms its plan to cut 6,000 jobs in Italy as union negotiations begin

UniCredit confirmed plans to cut a total of 6,000 jobs in Italy over the next four years as the country’s biggest bank began the negotiating process with unions over layoffs and branch closures on Monday.

In December, UniCredit unveiled a new plan to 2023 under which it would cut 8,000 jobs and close 500 branches, and unions said then they expected 5,500 layoffs in Italy and up to 450 branch closures.

UniCredit said in a letter to unions dated Feb. 10, a copy of which was obtained by Reuters, that there would be 5,500 cuts in Italy under the new plan, as well as another 500 which it still has to carry out under its previous plan to 2019.

Milan-based UniCredit, which also confirmed the 450 planned branch closures in the letter, declined to comment.

The bank has undergone a major restructuring under French chief executive Jean Pierre Mustier, who was hired 2016 to turn it around and tackle concerns about its weak capital base.

To strengthen the balance sheet, Mustier has slashed costs, dumped bad debts and shed assets. He also raised 13 billion euros ($14 billion) by selling new shares to investors.

Mustier’ first business plan, dubbed ‘Transform 2019’, envisaged a total of 14,000 job cuts.

In a sign his strategy is on track, UniCredit in December said it would improve shareholder returns through dividends and a share buyback.

Last week, the bank said it was considering further lifting capital distribution as it met its profit goal.

In the letter UniCredit said revenue trends would never go back to levels seen before the global financial crisis, pointing to the challenge posed by negative interest rates and competition from non-banking players.

UniCredit said it had to bring down costs to be able to provide services at a competitive price to customers who were increasingly switching to digital channels.

It said it had recorded more than 300 million transactions on non-traditional channels in the past 12 months, while those carried out in a branch were down 55% on 2016 levels.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.