AI and digitalisation to eliminate 9,000 jobs in a italian bank
Intensa Sanpaolo will change its organizational structure in a bid for AI and digitalization.
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.
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Digital transformation is a case study in the financial sector. The emergence of fully digital neobanks has challenged traditional banking.
In different countries, digital native banks can offer better interest rates for savings and lower rates for loans because their low-cost structure allows them to do so. While a traditional bank has hundreds of physical branches to serve customers, most digital banks can solve all their customers' requirements digitally.
The measure adopted by Intensa shows that traditional banks must focus their efforts on not being left behind in the great technological change of the 5.0 revolution.
© Agence France-Presse and Al Dia News
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