Economy & Politics

Staff reductions resume in banks

If 2020 seems like a parenthesis, 2021 promises to be an eventful year in the banking sector. Proof of this is the movements initiated at global and European level of the main players. Luxembourg should not escape the trend.

Jean-Michel HENNEBERT

Jean-Michel HENNEBERT

If 2020 seems like a parenthesis, 2021 promises to be an eventful year in the banking sector. Proof of this is the movements initiated at global and European level of the main players. Luxembourg should not escape the trend.

Postponed due to the pandemic, the loss of tens of thousands of banking jobs around the world will resume. Proof of this is the announcements made in recent weeks within the twelve main investment banks worldwide. Cuts made elsewhere mainly in Europe, since in the third quarter of 2020, 5% of the front office staff were deleted across the entire Old Continent, according to Les Echos.


Wi, Bank ranking .Finanzplatz Luxemburg.Foto: Gerry Huberty / Luxemburger Wort

Questioned by Luxembourg for Finance (LFF), the executives of the financial sector and insurance believe that the current health crisis will generate “a more volatile operating environment”. This should translate into a drop in operating budgets in 2021.


And the outlook for the next few months does not look particularly encouraging since the sword of Damocles, which had been raised since March, is making its return. Whether at HSBC which had announced, in February, the cut of 35,000 jobs over three years and the reduction of its activity in the United States and Europe, at Unicredit and its 8,000 cuts planned by 2023 or even at Deutsche Bank with a planned reduction of 18,000 jobs by 2022.

In total, no less than 88,000 jobs in Europe should be cut, according to announcements made by a dozen banks in the months preceding the arrival of covid-19. These announcements are justified by the consequences of digitization, the maintenance of low rates and the emergence of new players, more agile than traditional banking establishments.


WI. Ranking of banks. Banken, Finanzplatz Luxemburg, Arendt,. Photo: Gerry Huberty / Luxemburger Wort

At the time of annual reviews, the “Luxemburger Wort” has played the game of compiling data from players in the banking sector. A ranking of banks which demonstrates the transformations underway within the main pillar of the Luxembourg economy, even before the impact of covid-19.


“For Luxembourg, to date, we have no concrete information on a drop in staff in the establishments of the Place”, indicates Friday Laurent Mertz, secretary general of Aleba. Same story on the side of the OGBL where Véronique Eischen ensures “not to have heard of anything for the moment”. While the two unions both concede that the international context is “complicated” and that its impact should materialize in 2021, their analysis of the solutions to be provided diverges deeply.

The Aleba highlighting the agreement in principle found with the ABBL and the ACA to allow the employees of the Place to “benefit from stability”, the OGBL supported by the LCGB wishes to “negotiate in the collective agreement measures to maintain employment, precisely because of the current uncertainties ”. For once, the concerns of the unions are shared by Luxembourg for Finance, the market promotion agency, which evokes “major disruptions” to be expected from next year.


Ten days after the announcement of an agreement in principle between Aleba and the employers’ representatives of banks and insurance companies, the OGBL and the LCGB denounce “a unique rider”. All of this against a backdrop of questioning of sectoral representativeness.


In question, according to senior executives active in large banks, asset managers or insurers, the decline in turnover for 2020 compared to forecasts and the freezing of international investments in 2021. At the national level, Statec’s latest forecasts forecast a growth of 7% of the GDP in 2021. Forecasts which will be revised downwards in an economic report to be published “at the end of November, or even a little earlier because certain things are happening. to do ”, according to Serge Allegrezza, director of Statec.

According to the European Commission, growth in the Grand Duchy in 2021 should reach 3.9%, against 3.5% in Germany, 4.1% in Belgium and 5.8% in France.


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