Banks are freezing staff and branch cuts

By Leonidas Stergiou

The plan to close 120 bank branches and cut staff by 1,500-1,600 within the year is on hold due to the energy crisis and the war in Ukraine. The crisis was a game-changer for banks, as it amplified the social and economic impact of network and employee restructuring.

In a period of declining disposable income and uncertainty, voluntary exit packages are becoming more expensive. Especially, when there have been similar programs in recent years that have reduced the average age and should now become more attractive. On the other hand, the movement of employees between group companies or through spin-offs etc. continues. (eg real estate companies, management of bad loans, etc.).

Everything that happened until the first quarter

Thus, the banks stop at what was launched from the end of 2021 until the first quarter of the year, with the main actions being the voluntary exit of Eurobank announced in February and the queues from the second voluntary exit of Piraeus Bank in November 2021 and of the National Bank in December of the same year.

From these moves, the number of stores decreased by 43 (against a target of 120 stores), the number of employees by 813 people (against a target of 1,600 people) and the number of ATMs increased by 213. That is, for every 1 store that closes , 20 employees are reduced and ATMs are increased by 5.

Voluntary exits

Eurobank proceeded to close 25 branches, as it had planned, while around 400 employees participated in the voluntary exit. About the same number participated in the National Bank program, while about 200 in the second volunteering of Piraeus in 2021. Most of these workers have already left (about 800 people), while by the end of the year an additional 200 people will gradually leave.

Movements by bank

From the original plan, only Eurobank managed to achieve the target of reducing branches by 25 in 2022. Alpha Bank closed 12 branches against a target of 15, mainly from planned actions that had started from autumn 2021, with the voluntary exit 600 employees. Piraeus Bank closed 6 branches, against an initial plan for around 50, while National Bank left the network unchanged at 2021 levels.

In the first semester

In total, the four systemic banks have 1,308 branches and employ 27,101 employees (against 1,351 and 27,914, respectively, last year). Their goal is to reduce total branches to 1,200 and employees to 24,000 by 2025. This means they are going to close an additional 150 branches and leave at least 3,000 employees from the banking industry. This will be done primarily through voluntary spending programs that will be reinstated once the economic climate improves.

The biggest movements are expected mainly from Piraeus Bank and National Bank, as these are the two systemic banks that have branches and staff considerably higher than the “up to 300 branches and up to 6,000 employees” norm.

In the first half of the year, Piraeus Bank employed 8,507 employees (8,900 at group level), compared to 8,554 employees in 2021. Its goal, as stated in the updated business plan, is to reduce the number of employees to 6,000 by 2025. It also has 408 branches, compared to 414 last year.

National Bank shows no changes as it remains at the level of 7,130 employees of 339 branches from the end of 2021.

Alpha Bank has achieved the target for the number of employees and branches. The Bank employs approximately 5,320 people (5,923 in the Group in Greece) and has 287 branches.

Eurobank has achieved the target for the number of branches (274 from 299 last year) and is close to the level of 6,000 employees. In the first half, it employed 6,134 workers compared to 6,660 in 2021.

Average terms

However, these numbers are averages and are not representative of other restructuring, such as moving employees within groups, stores or replacing ATMs that support e.g. payments with withdrawal-only machines. Nor do they also show recruitment of specialized executives at the level of groups and banks, mainly in digital transformation.

For example, observing the number of employees at group level in Greece from quarter to quarter there are also small increases, while together with international activities there are decreases. Because there is a renewal of the staff and managers as well as the attraction of employees from their subsidiaries abroad or from other companies. However, the balance is negative.