Nordea Bank’s 6,000 Job Cuts Are Just the Beginning, Union Says

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Nordea CEO on Job Cuts, Relocating, MiFID

One of Sweden’s main financial-worker unions says the job cuts announced in October by Nordea Bank AB are just the beginning of a transformation that’s about to hit the whole industry as more financial firms come to rely on digital solutions.

The Nordic region’s biggest bank has yet to reveal to its staff who exactly will be affected by the cuts. Nordea has just said it intends to get rid of 4,000 full-time employees and 2,000 consultants. Those announcements will be made internally and department by department at regular intervals over the coming years, the bank has said.

At Sweden’s Civilekonomerna union, Head of Negotiation Mikael Andersson says employees at other banks should gird for similar developments.

“Nordea, with its announced job cuts, is no exception,” Andersson said in a phone interview on Thursday. “This development with rationalizations will also happen at other banks, as it’s general.”

Nordea chief executive officer, Casper von Koskull, has gone so far as to say the financial industry may have half as many workers a decade from now as it adjusts to a digital revolution that will make several human functions redundant. This will affect simple tasks like reporting lost or stolen credit cards, but can even be extended to more sophisticated jobs, including functions supporting investment banking, according to Nordea’s chief digital officer, Ewan MacLeod.

IT Specialists

The move toward digital services increases demand for IT specialists, and when there’s a shortage of those skills, hiring moves elsewhere. That may mean roughly 3,000 Danish jobs may move outside the country over the next two years, according to a recent study commissioned by the Financial Services Union, newspaper Berlingske reported on Friday.

The technological transition hitting the financial industry makes it inevitable that fewer humans will be needed, and Andersson says “Nordea’s job-cut announcement did not come as a surprise to us.”

“The whole sector is sitting in the same structural boat,” he said. “What Nordea talks about are costs for technology development of, for example, savings solutions and partly robotized services, and digitization. These developments are coming across the banking and financing sector.”

That doesn’t have to mean a drop in headcount as the growing fintech industry creates jobs and products and services evolve, argues Ulrika Boethius, president of the Financial Sector Union of Sweden.

“The sector as a whole plays an important role in the future as well, so we don’t see that it necessarily has to shrink,” she said. “We as a union firmly believe that changing competencies doesn’t mean changing people -- it’s very important for the employer to provide existing employees with the right competencies.”

The union is also hoping Nordea will reduce staff through natural attrition, such as pension arrangements and voluntary packages to those who leave.

“What could be a big deal is if Nordea wants to actually lay off some people and exchange them with others,” she said. “So far we have no evidence that they will fire people.”

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