Italian banking major UniCredit has announced plans to shed 18,200 jobs by 2018, as part of a revised strategic plan aimed at improving capital position.
The announcement comes as the bank posted an attributable net profit of EUR507m in the third quarter of 2015, down 29.7% from EUR722m in the year-ago quarter.
The layoffs, representing almost 14% of the workforce, include around 6,000 jobs that will be axed due to the planned sale of UniCredit’s Ukraine arm and a stake in Pioneer Global Asset Management.
Under the plan, the lender would exit or restructure some of its underperforming operations, such as its retail banking operations in Austria and its leasing business in Italy, by 2016 end.
It aims to reduce costs by EUR1.6bn or about $1.7bn by 2018, mainly through trimming its commercial banking businesses in Austria and Germany.
It also intends to become a simpler and more integrated group by assuming direct control of its Eastern Europe unit.
In addition, the bank aims to make investment of EUR1.2bn for digital enhancements.
UniCredit CEO Federico Ghizzoni said: "Today we approved a Plan envisaging ambitious goals for 2018, both in terms of profitability and capital, thus confirming the Group’s capability to generate capital organically and distribute dividends. We aim at these goals in a persistently tough macroeconomic environment, marked by historically low interest rates and decelerating worldwide economic growth. The plan is rigorous and at the same time ambitious.
"Above all, it is a realistic Plan, as it is based on our managerial decisions and it is a totally self-financed Plan. Therefore, we are fully confident of its successful execution. We can now concentrate on reinforcing our European commercial bank franchise with significant cost containment measures and further discontinuity actions, and by exiting or restructuring poorly performing businesses."