The list of European banks embarking on cost cutting measures seems to grow each month, with Dutch lender ABN Amro becoming the latest group to announce plans to cut a portion of its workforce to reconcile its operating costs, according to a Reuters report.
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European banks have been hard hit over the past year with a trifecta of debilitating fines, lagging revenues, and rising operating costs finally taking a toll on earnings reports that have left shareholders reeling. At the epicenter of this phenomenon has been London, which has seen the largest proportion of job cuts ranging from back office and IT positions to the wholesale consolidation or closure of FX and fixed income desks.
Unwelcome Trend
For its part ABN Amro has largely abstained from the same levels of cost cutting seen from other lenders such as Standard Chartered or Deutsche Bank – the latter systematically cut, and announced additional plans for axing upwards of 35,000 jobs over the next few years.
The lingering effects of unprofitability have also led to banks shaving costs in the personnel department. ABN Amro announced it would cut between 975 and 1,375 jobs as part of cost-saving efforts through 2020 intended to eliminate nearly €200 million ($225 million).
Gerrit Zalm, CEO, ABN Amro
The announcement was followed up in a note to ABN employees in which Chief Executive Officer (CEO) Gerrit Zalm warned that the job losses would encompass multiple departments across the group’s activities. Perhaps as a harbinger of things to come, Mr. Zalm also did not rule out further job losses, taking a page out of Deutsche Bank CEO John Cryan's book, who has doubled and in some cases tripled down on such cost cutting strategies.
