NEW YORK – Banco Santander SA plans to cut its workforce by 11% in Spain as the lender continues the process of shuttering duplicated branches following the purchase of Banco Popular Espanol SA two years ago.
The Spanish lender told unions the measure will entail eliminating 3,700 jobs and closing 1,150 branches, according to a statement by the CCOO union on Tuesday. Most of the job cuts will be in retail branches but some jobs in central offices will be affected as well.
“Such a high figure of job destruction is highly worrying,” the union, which represents bank workers, said in the statement. “Our first objective is therefore to reduce the figures proposed by the bank.”
Santander declined to comment.
The steps are part of a global plan to cut annual costs by 1.2 billion euros ($1.4 billion) as the bank seeks ways to compensate for a low-interest rate environment that’s eroding profits in Europe. Santander has come under pressure from investors to improve its capital buffer levels, which are some of the lowest among its regional peers.
Santander’s Spanish unit had 32,366 employees in 4,366 branches at the end of March, according to the bank’s first quarter report.
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.