Caixabank plans to lay off 18% of staff after merger with Bankia

Caixabank, the largest bank in Spain, plans to lay off 18% of its staff, 8,291 workers.

The financial institution intends to close 1,534 of its offices across Spain, a 27% reduction.

This comes barely one month after it confirmed its merger with Bankia, on March 26, which made it Spain's largest lender.

Before the merger, both companies employed over 50,000 people (35,000 at Caixabank and 15,000 at Bankia). While a recent Barclays report suggested that around 5,750 workers could be left jobless, the bank has eventually gone even further.

With 6,727 offices combined across Spain, the new institution far surpasses Santander's 3,222 and BBVA's 2,592. According to the same report by Barclays, 1,411 Caixabank and Bankia offices shared the same ZIP code and were at risk of being shut - again, the assessment was overly optimistic.

Caixabank is now the largest bank in Spain with around 20 million clients (10 million digital), €623.8 billion in assets, and market capitalization of over €20.5 billion. Moreover, it also holds the leading position in the market shares for deposits (24%), loans (26%) and long-term savings (29%). 

Not only has the resulting institution kept Caixabank’s name, but also its legal headquarters in Valencia, where it relocated from Barcelona in 2017 following political tension and economic uncertainty in the wake of the Catalan independence bid. However, the central headquarters will be divided between Barcelona and Madrid. 

754 Catalan job losses forecast

Caixabank is seeking voluntary redundancies but has said that a maximum of 50% of layoffs can be staff over 50 years old, in order to avoid a "generational imbalance." Beyond voluntary redundancies, Caixabank is also proposing cuts based on "meritocracy" as a second criterion.

Job losses will also be spread across different regions, with a total of 754 people expected to be laid off in Catalonia. There will be 595 job losses in Barcelona, 85 in Girona, 38 in Lleida and 36 in Tarragona.

Unions decry "shameful" cuts

Unions have described the job cuts, equivalent to more than half of Bankia's 15,000-strong pre-merger workforce, as "shameful" and "savage." The UGT said it was "a scandal" that the bank was including 2020 results in its argument while CCOO said the move showed "a lack of respect" and that it would result in forced dismissals.

"Worrying" news says Catalan government

The Catalan government described the news from CaixaBank was "worrying". Spokesperson Meritxell Budó said early on Tuesday afternoon that they want to wait to have more information in order to make a "comprehensive assessment" of the situation, adding that they will be "vigilant and attentive to how it evolves."

Meanwhile, María Jesús Montero, Spanish government spokesperson, said that if it weren't for the merger between Caixabank and Bankia "we would be talking about much higher cuts."

The finance minister added that the administration was making "titanic" efforts to prevent job losses, citing the example of temporary unemployment schemes (ERTOs).

Historic cuts

The job cuts will the second largest ever in Catalonia, according to the Ara newspaper, surpassed only by automaker Seat's cuts in 1993, which affected almost 9,000 employees. They will be the third largest cuts in Spain, the biggest in the history of the financial sector.