SocGen To Fire Thousands Of Bankers

As restrictive regulations (MiFid II forced the separation of banks' trading and research businesses) and intensifying competition from American rivals continues to hamstring once-proud European investment banks, SocGen is reportedly the latest continental titan preparing to dramatically reduce the size of its Global Banking and Investor Solutions unit - cuts that could include thousands of jobs - while the bank searches for a partner for its cash equity business (a strategy that has been embraced by other European banks as MiFid has changed the rules surrounding research and other typical i-banking functions).

One of the bank's unions said the bank's traders are bracing for some of these cuts, though the bank is still reportedly weighing which businesses will bear the brunt of the cuts. Shareholders who have punished the company over the past year - the bank's shares have largely missed out on the STOXX 600's 2019 rebound - bid its shares higher on Friday, with SocGen shares rallying more than 2% on the news.


More from Bloomberg:

The bank could cut hundreds or even thousands of jobs at its global banking and investor solutions unit, including roles in support functions such as finance and human resources, one person familiar with the situation said, ask not to be identified because the matter is confidential. SocGen is still weighing up which parts of the business would bear the reductions, the person added.

Societe Generale declined to comment.

SocGen’s GBIS unit has more than 20,000 employees. One of SocGen’s main French labor unions said Feb. 8 that the bank is bracing for "important” cuts to trading jobs. Chief Executive Officer Frederic Oudea has said it’s too soon to comment on any headcount decisions.

The cuts would be part of CEO Frederic Oudea's drive to cut 500 million euros ($567 million) of costs and place all less-profitable investment-banking business lines under review. Oudea promised the cuts after the bank reported brutal Q4 earnings (it has already slashed trader bonuses and said it would eliminate the last vestiges of its prop trading unit).

Cuts would also be part of the efforts by the i-bank's new leader, Deputy CEO Severin Cabannes, to readjust a business plan developed by his predecessor.

While news of the bank's plans was well-received by investors, we can't help but wonder how Jeffrey Gundlach, who lashed Oudea on twitter earlier this month when SocGen's shares touched a five-year low.