A union negotiating with the bank said that, Sabadell wants to cut 1,900 jobs in Spain. This was under plans to cut costs and to make more money. Such a reduction would be Sabadell’s second in less than a year. The first will be the recent cutting of 1,817 jobs in Spain. Union Comisiones Obreras (CCOO) said that it saw no reason for a new round of layoffs at Sabadell, because there was no economic, technical, productive or organisational causes.
Spanish and European banks are trying to adapt to a customer shift towards online banking and cut costs. The number of job cuts could be ultimately lower, based on the outcome of previous negotiations. 85% of the proposed staff reductions would mainly be in Sabadell’s retail network. And also, the bank is expected to reach an agreement with unions towards the end of October. In May, Sabadell said that it expected additional cost savings and revenue growth. This is because of its new three-year strategic plan.
The bank‘s return on equity (ROE), was 3.10% at the end of June compared to a current estimated cost of capital of above 9%. The bank‘s failure to merge with bigger rival BBVA added pressure to pursue aggressive cost-cutting strategy. This is because, the investors worried about its ability to handle an expected rise in bad loans alone. Staff at Spanish bank are holding protests against layoff plans. BBVA and Caixabank recently agreed with unions to cut 2,935 and 6,452 employees, respectively.
