Nordea Bank, the largest financial services group in the Nordic countries, announced on Thursday that it will cut at least 6,000 jobs worldwide in order to bring down costs and increase competitiveness. About a third of the cuts will affect consultants, and the remainder employees.
Speaking at the quarterly results conference, Nordea's chief executive Casper von Koskull said the bank's recent investments in technology and digital banking have been costly and increased long-term expenditure.
"It is now time to enter the next phase of the transformation, [which] requires a shift in competence among our employees," von Koskull said.
According to Nordea, the job cuts will start later this year and continue until 2021. Some of the 6,000 jobs would disappear due to natural attrition, but outright terminations can not be avoided.
The bank has 31,800 staff members, most of them in Sweden, Finland and Denmark. Due to the availability of workforce and lower costs, Nordea said it will concentrate its back office operations in Lodz, Poland.
Trade union: "Shocking news"
Executive director Minna Ahtiainen from trade union Nousu, which represents Nordea's employees, said she considers the news both shocking and puzzling.
"Our staff has worked hard to do their part in improving corporate profits and many teeter on the edge of burnout. That's why these job cuts sound so unconscionable," Ahtiainen said.
"Nordea is supposedly committed to its clients and the society as a whole. But it's clear that these kinds of efficiency programmes will further lower the level of customer service and satisfaction," she added.
During the third quarter, Nordea reported an operating profit of 1.09 billion euros, down from 1.15 billion in the same period last year, but in line with analysts' expectations.
A sign of the times
Nordea's announcement is a sign of the ongoing technological revolution, said Mika Maliranta of the Research Institute of the Finnish Economy (ETLA).
"These jobs would have disappeared sooner or later anyway. If anything, it's positive the lay-offs take place during a booming economy, where people have more opportunities to find new work quickly," Maliranta said.
Nordea Bank operates over 1,400 branches in the Nordic and Baltic regions. It is present in 19 countries, although its main areas of operation are in Denmark, Norway, Sweden, Finland, Estonia, Latvia and Lithuania.
In 2017, Nordea decided to move its headquarters to Helsinki.