Intesa Sanpaolo to Cut 9,000 Jobs Amid AI and Digitalization Push

AI and digitalisation to eliminate 9,000 jobs at Intesa Sanpaolo

Milan (Italy) (AFP) - 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. At the same time, the bank plans to hire by mid-2028 some 3,500 young new employees to work in wealth management, it said in a statement late on Wednesday. The plan "aims at enabling generational change at no social cost" and the "further strengthening of future sustainability of the Group's results... with a resilient business model in the digitalisation and artificial intelligence scenario", Intesa Sanpaolo said. The changes should lead to 500 million euros ($540 million) of savings annually on staff costs from 2028. Some 7,000 of the job cuts are to fall in Italy and the rest in international units. The bank said it would take a 350-million-euro charge against fourth quarter earnings to finance the departures but that the provisions would not affect its guidance for a net profit above 8.5 billion euros in 2024. Intesa Sanpaolo shares were flat in midday trading in Milan.

AI and digitalisation to eliminate 9,000 jobs at Italy's leading bank

MILAN (AFP) - Italy's leading bank, Intesa Sanpaolo, has reached a deal with trade unions for 9,000 voluntary job cuts - around 10 per cent of its workforce - due to the expansion of artificial intelligence (AI) and digitalisation. At the same time, the bank plans to hire by mid-2028 some 3,500 young new employees to work in wealth management, it said in a statement late Wednesday. The plan "aims at enabling generational change at no social cost" and the "further strengthening of future sustainability of the Group's results... with a resilient business model in the digitalisation and artificial intelligence scenario", Intesa Sanpaolo said. The changes should lead to EUR500 million (USD540 million) of savings annually on staff costs from 2028. Some 7,000 of the job cuts are to fall in Italy and the rest in international units. The bank said it would take a EUR350-million charge against fourth quarter earnings to finance the departures but that the provisions would not affect its guidance for a net profit above EUR8.5 billion in 2024. Intesa Sanpaolo shares were flat in midday trading in Milan.

Italian bank plans huge job cuts as it looks to AI and digitalisation

Intesa Sanpaolo is to cut thousands of jobs and focus on a more resilient business model including more use of artificial intelligence and digitalisation. Italy's largest bank, Intesa Sanpaolo, is to cut thousands of jobs in an attempt to decrease costs and speed up the company's digital transformation. The cuts account for nearly 10% of the bank's current workforce. The company says that the cuts, which are expected to happen by 2027, will be voluntary. Some 2,000 of the posts will go across the bank's international subsidiaries, whereas 7,000 will go from jobs in Italy. They will also include 4,000 people who will either take early retirement within the next three years, or will be able to access a solidarity fund. The bank says that the cutbacks will result in cost savings of about €500m annually from 2028 onwards. The move has been made in an effort to solidify the sustainability of the bank's future results, as well as further enhance a stronger business model focusing on artificial intelligence and digitalisation. Although Intesa will incur about €350m in charges in Q4 2024 for this change, it has reassured investors that it would not be imparting the net income amount expected for the full year, which is about €8.5bn. The company is also making some targeted hires, in line with its new strategy. This includes hiring 3,500 young employees on indefinite-term contracts by next June, out of which 1,500 will be global advisors for network commercial activities. The European Investment Bank recently announced that it would be giving Intesa Sanpaolo a €500m counter-guarantee, which will then allow the latter to make a bank guarantees portfolio worth about €1bn. Bank guarantees are promises from banks to cover a third party's payment, if a borrower does not pay up. In turn, this tie-up will help support the power grid interconnection and supply chain for new EU wind farm projects. Gelsomina Vigliotti, the vice president of the European Investment Bank (EIB), said in a statement: "Wind energy is central to European energy independence. Producers are facing challenges such as high costs, uncertain demand, supply chain bottlenecks and strong international competition. "This agreement shows how the EIB's risk-sharing instruments help overcome these difficulties and finance key projects for the green transition and the decarbonisation of the European economy, while enhancing industrial competitiveness." Mauro Micillo, chief of Intesa Sanpaolo's IMI Corporate and Investment Banking branch said: "The energy transition requires significant investments and a virtuous collaboration between public and private stakeholders. In this context, the development of renewable energies is one of the key objectives of the green strategies at national and European level. "Thanks to many years of collaboration with the EIB, the IMI CIB Division of Intesa Sanpaolo has developed innovative instruments aimed at supporting large international groups' infrastructure investments, including interconnections and electricity grids, enabling strategic sustainable projects in Europe. "The recent transactions enhance our support for the entire wind energy supply chain, with a focus on ESG goals, in collaboration with our clients and the European institutions."

Italy's Intesa strikes deal with unions to cut staff costs

MILAN (Reuters) -Intesa Sanpaolo, Italy's largest bank, said it would save 500 million euros ($539 million) in staff costs starting from 2028 after reaching an agreement with unions on Wednesday to fund an early retirement scheme for 4,000 employees. The early retirements will be spread out through 2027 and will be accompanied by the hiring of 2,000 staff, Italy's main banking union FABI said. 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, FABI added. The 1,500 new hires will focus on boosting sales of wealth management and insurance products across Intesa's branch network, the bank said. Intesa said it would book a net charge of around 350 million euros in the fourth quarter to fund the voluntary exits, which would not affect its 2024 net profit goal of more than 8.5 billion euros. "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. Citterio said a new committee had been created to monitor the impact of growing digitisation on Intesa's operations. Technology advances are driving changes in banking globally, with artificial intelligence sharply reducing the need for staff dedicated to back-office functions. Intesa's deal comes days after a similar deal by UniCredit, Italy's second-largest bank by assets. UniCredit recently negotiated with unions to allow early retirement for 1,000 corporate centre employees, while committing to hire 500 new staff members. ($1 = 0.9273 euros) (Reporting by Valentina Za; Editing by Alvise Armellini and Lisa Shumaker)