UniCredit reaches deal with unions on job cuts in Italy

© Reuters. FILE PHOTO: A logo of UniCredit is seen in downtown Milan, August 18, 2014. REUTERS/Stefano Rellandini

By Valentina Za

MILAN (Reuters) -Italian lender UniCredit has signed an agreement with unions for 1,200 voluntary job cuts to be partly offset by 725 new hires, the country's biggest banking union said on Thursday.

The accord follows a new three-year plan https://www.reuters.com/markets/europe/unicredit-targets-2024-net-profit-above-45-bln-euros-2021-12-09 to the end of 2024 presented on Dec. 9 by Chief Executive Andrea Orcel, who had taken over in April from predecessor Jean Pierre Mustier.

At the time UniCredit had not disclosed job cuts, saying it first had to negotiate with unions.

The FABI union welcomed the accord reached overnight, saying the proportion of six news hires for every 10 departures was a first. Italian banking unions have traditionally aimed to offset 50% of layoffs with the hiring of younger staff.

Layoffs in Italy's banking sector target older employees because they are carried out exclusively through costly early retirement schemes funded by lenders.

After the presentation of the "UniCredit Unlocked" 2022-2024 plan, Italian unions had said there would be 950 voluntary departures through early retirement, plus 475 new hires.

FABI said that a further 250 job cuts had been agreed, fully offset by 250 new arrivals.

UniCredit will also make 1,000 temporary job contracts permanent in Italy, FABI said.

During Mustier's tenure UniCredit had cut 14,000 jobs under a 2016-2019 plan. A second plan presented in December 2019 and due to run through 2023 envisaged a further 8,000 cuts, 6,000 of which were to be in Italy https://www.reuters.com/article/us-italy-banks-unicredit-jobs-idUSKBN21J5J9. The bank eventually agreed 5,200 departures in Italy and 2,600 new hires under that plan.

With the bulk of previous redundancies hitting the bank's branch network, UniCredit targeted central functions, as well as international hubs, with its latest cuts.

FABI said that 83% of the new hires would beef up branch staffing while the remaining 17% will be in digital banking.

UniCredit is also planning to hire staff to boost its digital skills and client-facing activities in Germany, where a net 1,100 jobs will be axed by 2024, a source close to the matter said.

With the cuts targeting mainly the central offices of local arm HVB, the new hires will add staff dedicated to private banking and wealth management, the source said.