European banks set to implement larger cuts in staff numbers than their peers in the US, although big cuts are expected across the board.

Hundreds of thousands of banking staff have been let go since the financial crisis struck in 2008, but the largest banks are still reducing their headcounts to improve profitability. 

The largest reductions in staff are expected from European banks. UK-based HSBC plans to make 50,000 of its employees redundant by the end of 2017, in a bid to exit unprofitable operations Brazil and Turkey, shrink its investment arm and re-focus on Asia (see chart). This is part of a larger, cost-saving initiative, which the bank hopes will provide between $4.5bn and $5bn of savings.

chart

The second largest reduction is due to come from Germany-based Deutsche Bank. Its new chief executive, John Cryan, announced in October 2015 that the bank will cut its workforce by 35,000 in 2016. The largest contributor to this will be the disposal of retail bank Postbank, which employs 20,000 people and which Deutsche Bank is looking to sell. The bank is also going to withdraw its operations in Argentina, Chile, Mexico, Uruguay, Peru, Denmark, Finland, Norway, Malta and New Zealand.

The third largest reduction will come from Italy's UniCredit. The bank is keen to reduce its presence in Germany and Austria, and assume direct control over its eastern European business. 

Layoffs are going to be a themes this year among other top UK players. Apart from the mass exodus at HSBC, Barclays, Lloyds and Standard Chartered all plan on reducing their headcounts in 2016.

In mid-January, the new Barclays CEO Jes Staley announced that a further 1000 staff will be let go at the investment bank. This is on top of the estimated 7000 who are already scheduled to leave before the end of 2016. Meanwhile, retail and commercial bank Lloyds is in the process of executing a three-year plan to make 9000 redundancies, as part of its shift to a digital platform. So far, 2360 of these redundancies have been made.

Standard Chartered will be rolling back its expansion into Asia, as The Banker discussed recently, by shedding 15,000 jobs.

Elsewhere, another round of layoffs is going to be carried out by yet another newly appointed CEO, Tidjame Thiam, who is now at the helm of Switzerland-based Credit Suisse. In its Asia-focused overhaul, the bank estimates that some 5000 jobs will go worldwide.

Layoffs are expected to be significantly smaller among the largest US players, although this could be due to a reluctance among these banks to publicise long-term plans. Citigroup has already announced the largest round of layoffs, which started in January 2016. The bank wants to cut 2000 positions, primarily in its institutional business unit, which includes its trading and investment banking operations.

Something similar is happening at Morgan Stanley, which plans to cut 1200 jobs, including 470 from its fixed income, currencies and commodities businesses. In October 2015, the CEO of Bank of America Merrill Lynch, Brian Moynihan, said that he expects that the number of employees at the bank to keep falling, although he did not specify the exact figure. Throughout 2015, Bank of America was among the largest job cutters in the industry, as the number of its employees dropped by 10,435 from 223,715. 

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