AI and digitalisation to eliminate 9,000 jobs at an Italian bank

Italy’s leading bank, Intesa Sanpaolo, has reached a deal with trade unions for 9,000 voluntary job cuts – around 10 percent of its workforce – due to the expansion of artificial intelligence (AI) and digitalisation.

The bank said it would save 500 million euros ($539 million) in staff costs starting from 2028 after reaching an agreement with unions to fund an early retirement scheme for 4,000 employees.

At the same time, the bank plans to hire by mid-2028 some 3,500 young new employees to work in wealth management.

The deal Intesa signed late on Wednesday comes days after rival UniCredit (CRDI.MI), opens new tab negotiated with unions to allow early retirement for 1,000 employees, while committing to hire 500 new staff members in its branches.

Technology advances are driving changes in banking globally, with artificial intelligence sharply reducing the need for staff dedicated to back-office functions.
Intesa will spread out the early retirements through 2027 and hire 2,000 staff to replace half of the people leaving, banking union FABI said.

The bank said it would cut another 3,000 positions in Italy and 2,000 at its foreign subsidiaries by the end of 2027 by not replacing people who get to pension age or change job.
The position being cut at the foreign units will all be in central functions, without affecting branch staff, Intesa said.
“With today’s accord we’ve provided initial answers to help workers facing the digital transformation that will reshape banking in the coming years,” said Paolo Citterio, FABI representative within the Intesa group.
Among the rate-sensitive megacap stocks, Nvidia, Apple, Amazon and Meta Platforms all lost more than 2%.

Citterio said a new committee had been created to monitor the impact of growing digitisation on Intesa’s operations.
With technology allowing banks to automate processes which used to require manual labour, lenders can focus their resources on relations with customers.
In Italy, Intesa will hire another 1,500 people on “hybrid” contracts, meaning they will work part time directly for the bank and as consultants the rest of the time, according to FABI.

The 1,500 new hires will be dedicated to boosting sales of wealth management and insurance products across Intesa’s branch network.
Intesa will book a net charge of around 350 million euros in the fourth quarter to fund the voluntary exits, with no impact on its 2024 net profit goal of more than 8.5 billion euros.

Source:Reuters