what is happening in the banking sector which has cut 60,000 jobs worldwide in 2023?

Société Générale has not escaped the social crisis affecting the banking sector and will carry out a vast reorganization. The bank plans to cut 900 positions in France.

It is especially at the headquarters of Société Générale, in Paris La Défense, that the reorganization will affect jobs. The 900 positions cut, announced by the French bank on Monday February 5, mainly concern so-called support functions, such as IT.

On paper, this plan aims to simplify the operation of Société Générale and improve the efficiency of the banking group by pooling its activities. In reality, these cuts are also one of the direct consequences of the merger of Société Générale with Crédit du Nord, whose positions cause duplication.

Bad strategic choices and stock market fall

The group wants to save money and the CEO, Slawomir Krupa, makes no secret of it. In September 2023, he presented a plan to reduce costs by more than 1.5 billion euros, reaching 1.7 billion within two years.

Its objective is to fundamentally transform Société Générale. Wedged between Crédit Agricole and BNP, it is often presented as “the smallest of the big banks”. And its latest results are disappointing. It must be said that it was slow to leave Russia and that it poorly anticipated variations in interest rates. As a result, it lost investor confidence and the stock price fell.

The boss’s ambition is therefore to return to profitability as quickly as possible. The unions are worried. Although the group assures that there will be no forced departures, for the CGT, this plan of cuts is a “earthquake”. The fear is that this will open the door to other restructurings, particularly in the context of possible transfers of certain activities.

A massacre in the banking sector

More broadly in the banking sector, at the moment, it’s a bit of a slaughter. It started a few years ago, with digitalization and online services. Many agencies have closed, but there, with artificial intelligence, jobs are changing very quickly and disappearing. All in a tense economic context due to the increase in interest rates.

The result is that many banks are cutting staff numbers. We can also recount the setbacks of Crédit Suisse, which, on the verge of bankruptcy after questionable investments, was bought by UBS. Brexit, too, has led the City, the London stock exchange, to scale back. In 2023 in total, according to experts, the banking sector will cut 60,000 jobs worldwide. And it’s clearly not over.