BBVA has reached an agreement with majority of the labour unions to trim its workforce in Spain.
The banking group will reduce its headcount by 2,935 people through layoffs and voluntary terminations. The redundancies represent nearly 10% of its employees in the home market.
Additionally, the agreement also includes closing around 20% of its branches in Spain. This will involve shutting down 480 locations.
BBVA redundancies: Details
The redundancies will include 2,725 layoffs and 210 leaves of absence. Around 2,177 of the affected employees are employed in the branch network.
Additionally, 350 people from the Corporate Center; 254 people from BBVA Spain’s Central Services and 154 people from intermediate structures of BBVA Spain will also be made redundant.
BBVA also agreed to an outplacement programme through HR firm Randstad. The programme will aim to provide full-term employment or self-employment opportunities to all affected employees.
The programme is expected to run for one year and can be extended up to 30 months.
The overall plan is estimated to cost around €960m before taxes. The redundancies will cost around €720m, while closure of branches will involve an outlay of €240m.
The total cost will be recorded during the second quarter of 2021.
The process is also expected to generate estimated savings of around €250m annually before taxes from 2022.
In a statement, BBVA said: “An adjustment plan is needed to ensure the competitiveness and the sustainability of employment in the future given the current context of profound transformation in the sector, marked by a tremendous competitive pressure, low interest rates, the accelerated adoption of digital channels by customers and the entrance of new digital players.”