A massive banking group plans to cut a whopping 9,000 jobs by the year 2027 to reduce costs and accelerate its AI and digital transformation.
Italian banking group Intesa Sanpaolo has announced its intention to eliminate 9,000 jobs by 2027 as part of a cost-reduction strategy aimed at accelerating its digital transformation and integration of artificial intelligence (AI).
This initiative is designed to enhance the bank’s business model in the evolving digital landscape and will take place without social costs, according to Yahoo Finance.
Specifically, 7,000 job cuts are planned in Italy, while 2,000 will occur at international subsidiaries.
The bank expects these changes to save approximately €500 million ($539 million) in personnel costs starting in 2028.
This decision follows an agreement with unions to implement an early retirement program for 4,000 employees.
Intesa Sanpaolo has collaborated with various trade unions, including FABI, FIRST CISL, FISAC/CGIL, UILCA, and UNISON, to facilitate this transition.
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The agreement focuses on investing heavily in technology to support this generational shift, aiming to create simpler and more efficient service models for customers.
It also includes a comprehensive upskilling and reskilling initiative for employees to address the growing demand for digital skills and new job roles.
The plan features a voluntary exit option for all employees in Intesa Sanpaolo’s Italian branches, including management.
Employees eligible for retirement by December 31, 2030, can apply, with priority given to those with disabilities or caregiving responsibilities.
Additionally, the bank plans to hire 3,500 young professionals on permanent contracts by June 2028 to strengthen its Wealth Management & Protection services.
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By 2027, the bank anticipates 3,000 more exits in Italy, with a net reduction of 2,000 positions in international subsidiaries, mainly affecting central functions rather than customer-facing roles.
Intesa Sanpaolo expects to incur a one-time charge of about €350 million, net of tax, which will be recorded in the fourth quarter of 2024.
The rise of AI technology is reshaping industries worldwide, and the banking sector is no exception.
As financial institutions increasingly adopt AI-driven solutions to streamline operations, enhance customer service, and reduce costs, many traditional roles are becoming obsolete.
Tasks that once required human intervention, such as data entry, basic customer inquiries, and transaction processing, are now being efficiently handled by automated systems.
This shift towards automation is prompting concerns about job security.
Many professionals find themselves displaced as banks like Intesa Sanpaolo leverage AI to improve efficiency and service delivery.
While the introduction of AI can lead to cost savings and improved accuracy, it simultaneously raises questions about the future of work in the sector.
As institutions navigate this transition, there is a pressing need for comprehensive retraining programs that equip employees with the skills necessary to thrive in an AI-enhanced environment.
Upskilling initiatives can help workers adapt to new roles that focus on areas where human judgment and creativity still play a vital role, such as relationship management and strategic decision-making.
However, the challenge remains significant, as many employees may struggle to transition to roles that require different skill sets in an increasingly automated landscape.
