Banking will close its decade of greatest transformation with a third fewer employees

The financial crisis and the pandemic, the two worst moments in the history of the sector, will destroy almost 90,000 jobs in just ten years.

Facade of the Bank of Spain

Spanish banks have experienced two of their worst crises concentrated in the last decade, which have occurred in parallel to one of the greatest transformations in their history: digitization. To financial crisis 2012 has been followed only eight years later by the pandemic, which has accelerated and intensified the digital relationship that clients maintain with their financial institutionsSo that by the end of 2021, banking will have closed the ten years of greatest transformation in its history.

This situation has had multiple collateral damages, among which the most sensitive, the job. At the end of this year, Spanish banks will have a staff more than 35% lower than ten years before, which means the destruction of about 90,000 jobs.

According to the latest data available from the Bank of Spain, Spanish entities had about 176,838 employees on their staff at the end of 2019, which is 27% less than in 2011, just before the financial crisis broke out.

At that time, the joint workforce amounted to 242,726 employees, although the all-time high it had been reached shortly before, in 2008, at the time of the bursting of the real estate bubble, which gave rise to one of the worst crises in the history of Spain. Then the workers in the banking sector reached the figure of 270.855.

Things are very different now. Throughout the past year, the country’s eleven largest banks cut more than 3,200 jobs, according to the information provided to the market, to which is added the strong cut that will be carried out throughout 2021, which could reach 17,000 jobs, depending on how the negotiation processes for collective dismissals that are in progress.

CaixaBank branch.

CaixaBank branch.

Some adjustment processes have been negotiated in recent months, such as that of Santander (3,572 outputs) or that of Ibercaja (750 affected) and the early retirements agreed by Sabadell (1,800), while others are now beginning to be discussed between the management and the unions, such as those of CaixaBank Y BBVA.

In the air is, for the moment, the one that will have to carry out Unicaja after merging with Liberbank, which will not begin to negotiate until the legal integration is carried out, which will happen, predictably, next summer. Taking these figures into account and in the absence of definitive data the sector could close 2021 with around 156,000 employees.

Double restructuring

Mergers are the main source of job destruction in the banking sector and in the last decade there have been two rounds of consolidation. The first, the strongest, occurred after restructuring the savings bank system, with nationalizations and injections of public capital involved, and led to numerous mergers, with the consequent disappearance of dozens of entities.

The financial system went from being dominated by savings banks in every corner of the Spanish territory to having just a dozen banks. In fact, the figure of the savings bank has practically disappeared today and at the moment only two entities carry that surname: Colony (the old Caixa Pollença) and Caixa Ontinyent.

The second round of consolidation is currently underway. The pandemic, to which entities arrived already mired in a severe profitability crisis due to low rates, has forced entities to insist even more on the search for efficiency.

Mergers have become a solution for some of them. It is the case of Bankia, which legally disappeared last month after a decade of existence by joining CaixaBank, and that of Liberbank, which will do the same in the coming months, once it joins Unicaja.

This situation displeases the unions, who lament the “constant” destruction of employment in the sector. From UGT consider “inadmissible” that in the context of the health crisis “tens of thousands of people and their families are once again placed in a dramatic situation full of uncertainty ”.

The decline of the office

However, mergers are not the only source of bank job destruction. Most of the bank workforce has always been in the branch offices, which, due to the digitization of the sector, look to the near future with a high dose of uncertainty.

The bank branch network has been reduced by almost half since 2007, before the outbreak of the last economic crisis, until the 22,299 that it had at the end of 2020, and the remaining branches are in full transformation. The Store of CaixaBank or the Smart and the Work Café Santander are just some examples of how entities are giving a new twist to a customer service concept that fewer and fewer users demand.

And it is that even older customers are changing their dynamics. The pandemic has accelerated the digitization of bank users, especially the elderly, who were always the furthest from new technologies. This situation puts banks on the ropes when it comes to managing their physical presence, as some clients continue to require face-to-face attention to carry out their procedures, especially in rural areas, where more older people live.

As visits to branches are reduced, the profiles that banks look for when hiring change, each time more technological. In less traditional entities, the trend goes much further, as the general director of N26 in Spain explains to Invertia in an interview, Marta Echarri: your entity’s staff is made up of 75% engineers.

For this transformation it is clear that there is no going back, as is the fact that this second great restructuring of the decade will also close with the collective dismissal clasp. It is confirmed once again that the reduction of bank staff is a trend that is far from stopping.