French Banks Reel from Job Cuts

Société Générale is putting the finishing touches on a highway-straddling building in La Defense, Paris’s financial district, designed to house more than 3,000 employees. As the project nears completion, the bank is also negotiating with its unions about the deepest-ever staff reductions at its corporate and investment banking unit. The job cuts “are a symbol” of the broader malaise in the French banking world, says Olivier Godechot, a sociologist at the Paris-based National Center for Scientific Research specializing in finance. “Its job cuts are particularly striking because Société Générale is the leading and most innovative bank on the Paris marketplace.”

BNP Paribas, Société Générale, and Crédit Agricole —France’s three largest banks by market value—expanded after weathering the 2007 subprime mortgage crisis with smaller writedowns than their U.S. rivals. Now they are in full-scale retreat as Europe’s sovereign-debt crisis enters its third year. The banks’ corporate and investment banking (CIB) units, with combined global sales of €25 billion ($32.5 billion) in 2010, are cutting 1,800 jobs in France, or about 10 percent of their staff there.