Santander prepares to make cuts to its workforce across Europe as part of a plan to save $1.2 billion in two years

  • Banco Santander is preparing for "changes" to the workforce across European businesses.
  • The changes are part of a plan to save $1.2 billion over two years.
  • The bank's CEO, José Antonio Álvarez confirmed changes would be made but has not specified how many or which employees will be affected.
  • Santander ended the third quarter of this year with ordinary profits of $2.05 billion, 18% more than in the second quarter, and 4% more than in the same period in 2019.
  • It accumulated losses of $10.59 billion in the first nine months of the year.
  • Visit Business Insider's homepage for more stories.

Banco Santander is preparing for changes to its workforce that will affect its European businesses in Spain, Portugal, the United Kingdom, and Poland.

The measure was confirmed on Tuesday at a press conference by the bank's CEO, José Antonio Álvarez.

Álvarez did not want to confirm how many workers will be affected by the measure, but Expansión puts the number of workers who could possibly be impacted by a round of layoffs at around 3,000.

"There will be adjustments to the workforce in all [European] banks. This involves discussions with the unions to adjust the needs of the distribution model, technology, operations, and staffing needs, and we will do it as always, in accordance with the unions," said Álvarez at the press conference as he presented the company's results.

During the presentation, he said he wasn't able to provide "any numbers" until they had met with the unions.

Santander had already undergone a round of layoffs relatively recently: 3,069 employees were dismissed after the absorption of Banco Popular in 2019.

The measure is part of a Europe-wide plan called One Europe.

Santander is hoping this initiative will help it save $1.2 billion in costs over the next two years.

As well as plans to simplify its product range, the bank is looking to streamline the development of tech apps for all European subsidiaries and to make "adjustments in distribution".

This will include office closures and layoffs

Santander hopes to do so "with an agreement … as we have done in the past," said Álvarez, who added that in similar situations previously, Santandar has made many staff relocations.

"Office transactions were falling to 8% prior to the pandemic and digital transactions were up 40%, with the pandemic this has risen even higher. Customers have the behavior they have and we have to adapt to this," added Alvarez, who said that this process has also led to up to 1,000 workers in digital areas.

The future of Santander offices is headed in the direction of "a smaller number" of establishments that will be different, with "a larger office size, where all the problems that customers have can be solved," added the CEO of the entity chaired by Ana Botin.

Santander will close the year with an ordinary income of $5.8 billion

Santander ended the third quarter of this year with ordinary profits of $2.05 billion, 18% more than in the second quarter, and 4% more than in the same period in 2019 — although it accumulated losses of $10.59 billion in the first nine months of the year.

"After lockdowns in the second quarter, the third quarter saw much more activity with private customers. In the second quarter, we had a lot of activity with companies because of government programs; in the third quarter, there was more consistent activity with the economy already having been released," said Alvarez.

Santander's forecasts are to end 2020 with $5.9 billion in ordinary profits, "if nothing exceptional happens in the fourth quarter," said the CEO, indicating that the revenue trend for 2021 looked "good".

Álvarez also noted that, for next year, they expect to have "good opportunities" in the wholesale business and insurance to grow in commissions.

As for the impact of the pandemic, Alvarez explained that they're using the International Monetary Fund forecasts as a reference, although they are "highly uncertain."

"In the countries where we operate, many will fall between 4% the best and 13% the worst," he says. "Next year, some will recover between 70% and 80% and others only 50%. There is a high degree of uncertainty."

Santander plans to expand its subsidiary Getnet

Getnet, the Brazilian payments management fintech that has already spread to Mexico, Chile, and Argentina, is a subsidiary of Santander.

Getnet helps process e-transactions and card payments via a small terminal. It's aimed at small businesses and e-commerce. It also enables the processing of payments with virtual cards or QR codes through smartphones.

"This company is trying to achieve scale," says Alvarez. "We're building it from what started out in Brazil, has now moved to Mexico, Chile, and Argentina, and will eventually provide services to the rest of the group. It's a fully operational business that processes millions of payments at a very low cost."

The bank is making plans for Getnet to cross the pond and expand into Europe within the next few years.

Source: Read Full Article