Canada's Big Banks Cut Most Jobs in 6 Years Amid Digital Threatby
The 1.3% reduction is the biggest quarterly decline in 6 years
Toronto-Dominion eliminated 1,594 jobs in 2015 restructuring
Canada’s six-biggest banks eliminated 4,664 jobs in the fiscal fourth quarter, the biggest quarterly reduction in six years, amid efforts to cut costs and adapt to digital banking.
The decline represents a 1.3 percent cut to the industry’s workforce from the end of July to Oct. 31, the most since the second quarter of 2009, according to data compiled by Bloomberg.
Toronto-Dominion Bank cut 798 positions in the three-month period, bringing cuts for the year to about 1,594 at Canada’s largest lender by assets in the past year as Chief Executive Officer Bharat Masrani embarked on a company-wide restructuring.
The bank’s restructuring effort is "largely complete" with "nearly all employees personally impacted by that review" notified, though more jobs may be cut in the first quarter, Chief Financial Officer Colleen Johnston said Thursday in a telephone interview from Toronto.
Canadian banks have been seeking to curtail expense growth to keep in line with slowing domestic banking earnings as the country’s economy sputters and borrowing by over-indebted consumers slows. The banks are also pushing to be more efficient, reinvesting into areas such as technology while shrinking branch sizes and consolidating support centers to address a shift in consumer preferences from in-branch visits to digital banking through smartphones and computers.
Royal Bank of Canada, the second-largest lender, had 1,375 fewer employees in the fourth quarter from its third quarter, and jobs are down 659 on an annual basis, according to financial statements.
Bank of Nova Scotia, the third-biggest bank, had 1,140 fewer jobs as of Oct. 31 compared with the end of July, the Toronto-based lender said.
"We hire a lot of summer students and that, so you would always see a bit of seasonality in the Q3 numbers," CFO Sean McGuckin said in a Dec. 1 interview. “But even beyond that, it is down a bit, but we continue to invest in the business."
Almost all Scotiabank’s lost jobs were in Canadian banking, where the bank is pursuing plans to close some back-office support operations over the next two years as it shifts more to digital banking. On an annual basis, Scotiabank’s workforce rose 2,282 to 89,214 workers as of Oct. 31, after adding employees from acquisitions in Peru, Chile and Uruguay in the fiscal year.
Bank of Montreal, the No. 4 lender, had 883 fewer jobs in the fourth quarter from the end of July, while fifth-ranked Canadian Imperial Bank of Commerce trimmed 184 jobs and Montreal-based National Bank of Canada cut 284 positions, according to company disclosures.