Date Published: 29/10/2020
ARCHIVED - Banco Sabadell to lay off 2,000 staff with UK and Spanish branches set to close
ARCHIVED ARTICLE
Branch closures are likely as online banking becomes the norm in Spain
Spain’s banks are currently incurring the wrath of many of their customers as they search for ways in which to increase their profitability, traditional avenues having effectively been closed off by the prolonged low interest rates established by the ECB, due to the introduction of new and increased maintenance charges for all account holders except those who meet more and more demanding sets of conditions.
But maintenance charges and fees for transactions carried out at manned cash desks are not the only strategies being pursued, and at an organizational level there has been much talk of possible mergers among the leading banks in order to make the use of infrastructures more efficient. Over the last few weeks there has been a good deal of speculation that Banco Sabadell was on the point of merging with BBVA or Kutxabank, but these rumours have now been scotched with the announcement that the company is avoiding mergers and has decided instead to reduce its payroll by doing away with 2,000 employees.
This represents 12 per cent of the current workforce of 16,570, but the bank is confident that such a significant reduction can be achieved in a way which is not “traumatic” through the offer of early retirement schemes to those being made redundant. 32 per cent of Sabadell’s staff are currently over the age of 50, and there can be little doubt that they will make up the lion’s share of those affected after forthcoming meetings with trades unions in order to finalize details of the operation: preliminary discussions have already been held with representatives of the workforce.
The same bank has also recently announced a re-structuring of its operations in the UK, where 900 staff are to be released and 160 branches closed as an attempt is made to attract business customers rather than individuals, and at the same time the door has not been closed on potential future mergers despite the BBVA and Kutxabank options now having been taken off the table.
These cutbacks in Banco Sabadell reflect the fact that more and more banking is now being done online, a change which has been accelerated by the effects of the coronavirus pandemic, and throughout the sector it is to be expected that the number of branches on high streets in Spain will fall over the next couple of years. Similar developments were seen during the last economic crisis in Spain a decade or so ago, and with many shops being forced to close due to the Covid crisis it seems that banks are also likely to be contributing to an increase in the numbers of empty commercial premises throughout Spain.