Intesa Sanpaolo Plans to Eliminate 9,000 Positions in Automation-Driven Transformation
In a significant move, Italy's competition regulator has forced Intesa Sanpaolo to halt the automated migration of thousands of customers to its online-only Isybank unit without their consent. This decision comes as part of a broader transformation strategy for the bank.
Intesa Sanpaolo, Italy's largest bank, has announced plans to cut 9,000 jobs by 2027, representing approximately 10% of its workforce. To offset this, the bank plans to hire 2,000 new employees to replace the 4,000 lost to early retirement and 3,500 "young people" to support artificial intelligence and digitalization.
The remaining 1,500 new hires will be on "hybrid" contracts, working part-time for the bank and the rest of the time as consultants. These new hires are expected to focus on boosting sales of the bank's wealth management and insurance products.
Intesa's CEO, Carlo Messina, has pledged to boost the bank's profitability by slashing costs and focusing on insurance, asset, and wealth management for fee income. The bank has increased its digital investments while aiming to cut retail banking costs.
The moves by Intesa Sanpaolo are part of a broader trend among Italian lenders. BPER Banca also plans to cut its workforce by about 10%. Meanwhile, UniCredit, the nation's second-largest bank, has negotiated an agreement this month to shed 1,000 employees while committing to hire 500 new branch workers.
Closing branches has been challenging in Italy due to an older clientele's reliance on brick-and-mortar locations. However, the bank expects to save €500 million per year in personnel expenses starting in 2028, following these changes.
Intesa Sanpaolo still anticipates net income of more than €8.5 billion for 2024. The bank has not provided specific details about commercial and retail aspects of these changes, nor has it disclosed any information about purchasing licensing rights or the responsible person overseeing the addition of 1,500 "hybrid" employees at Intesa Sanpaolo.
The new hires are expected to be in place by June 2028. Intesa Sanpaolo has offered exit packages to its entire Italian staff, including managers, with the goal of persuading 4,000 employees to retire early or access the European Union's Solidarity Fund.
This transformation strategy by Intesa Sanpaolo is a significant step towards digitalization and cost-cutting in the Italian banking sector. The bank aims to navigate these changes while maintaining its financial stability and profitability.
