MADRID, Spain – Banco Santander SA reached an agreement with unions to cut 3,223 jobs in Spain as the lender seeks to capitalize on the integration of failed lender Banco Popular Espanol SA to reduce costs.
The number of staff leaving is 13% less than the bank’s original proposal of 3,700 cuts. In order to push through the deal, Santander agreed to lower the minimum early retirement age to 55 from 58, with those people taking a redundancy package equivalent to 75% of their salary for eight years, said Ana Herranz, the Comisiones Obreras union’s representative for the bank.
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The steps are part of a global plan to cut annual costs by $1.4 billion (1.2 billion euros) as the bank seeks ways to mitigate for low interest rates in Europe that have hurt lenders’ revenue.
Santander’s Spanish unit had 32,366 employees in 4,366 branches at the end of March, according to the bank’s first-quarter financial report. Santander bought struggling Banco Popular, a lender crushed by ill-judged lending ahead of Spain’s 2008 property crash, for 1 euro in 2017.
As part of the global cost-cutting drive, the lender also plans to close 140 branches in the U.K. and eliminate 1,400 jobs in Poland, reducing its workforce there by 11%.
Charlie Devereux is a reporter for Bloomberg News.
