French investment bank Société Générale said Monday that it was embarking on “several organizational adjustment projects” that are expected to lead to the elimination of 640 positions, the latest step in its cost-reducing plan for the next two years.
The job cuts, which will all occur in France, and reorganization are part of an effort to reduce costs by EUR 450 million ($529 million) by 2023. The Paris-based bank revealed the plan Aug. 4, a day after it posted a EUR 1.26 billion ($1.48 billion) loss, its worst since 2008.
Although the bank was not explicit about the projects, it said that several are connected to its August announcement that it would cut back on risk-taking structured equities products, which could reduce revenues by as much as EUR 250 million ($294 million).
The bank’s Securities Services business and several group central functions, such as risk, compliance, human resources and communications, are also considering adjustments to improve efficiency, the bank said.
The planned reduction of the 640 positions will occur without forced redundancies, the bank said. SocGen will support affected employees by encouraging mobility or offering voluntary departures.
Speaking at a Bank of America conference in September, SocGen CEO Frédéric Oudéa said the bank was on the road to recovery during the third quarter after a rough first half of 2020, but that the bank’s third-quarter revenues would still be well below the same period in 2019. Last week, SocGen released third-quarter results reporting group net income of EUR 862 million ($1.024 billion), a 9.8% increase over the third quarter of 2019.
Oudéa said the rebound was the result of the strength of its capital, increased efficiencies, and savings from a potential merger of its two main banking branches, Société Générale, with about 7.3 million clients, and Crédit du Nord, with about 2.4 million clients. He said the merger would save hundreds of millions of euros by streamlining operations and combining information technology systems.
He also said that the bank would further increase its efficiency through job cuts and branch closings. The bank had already cut 1,600 jobs in April, about 1,200 of which were in its investment banking unit, as it joined other banks that had laid workers off during the COVID-19 pandemic.
--Additional reporting by Owen Poindexter and Theo Wayt