Scandinavia's Largest Bank Shocks Region With Mass Layoffs

Scandinavia's largest bank Nordea, which currently employs around 32,000 people, shocked the Nordic region with plans to reduce its workforce by 6,000 in the coming three-four years.

Nordea CEO Casper von Koskull explained that the company is almost two years into a profound transformation process, whose aim was to "structurally bring down costs" and "increase efficiency" amid a "strong balance sheet" and "robust business model." Nordea's aim is to reduce expenditures by roughly €5 billion ($6 billion) by 2021.

The company's goal for the coming years is to "take its centers of excellence to the next level." This will be achieved by increasing automation amid a "cultural transformation into a purpose-led and values-guided organization," the Finnish daily Hufvudstadsbladet reported.

​Berit Ohlsson of Sweden's Financial Sector Trade Union (Finansförbundet) called the layoffs extensive, yet predictable.

"Everyone knows that the industry is changing due to digitalization, automation, mobile banking, internet banking and decreased cash management. And this is something we have lived with for a long time. We know that all this means fewer employees," Berit Ohlsson told Swedish Radio.

According to Nordea's employees' trade union representative Paula Hopponen, the Nordic region was not ready for such drastic cuts. Hopponen also called Nordea's cuts "premature."

"The new systems are not yet in place and neither the staff nor the customers are ready to embrace them. Customers' needs are so multi-faceted that machines cannot take over," Paula Hopponen told Hufvudstadsbladet. "Being an IT expert does not mean that you also are a banking expert. I cannot endorse experienced employees being thrown out," she added.

"There is more work than staff can handle," Hopponen argued.

In September, Nordea plunged Sweden into shock by announcing the move of its headquarters to Helsinki, Finland following a protracted conflict with the country's "red-green" government over proposed tax increases and stricter regulations. Nordea also claimed Finland was a more desirable host nation due to its membership it the Eurozone. While the transfer ignited hopes of more jobs, around 900 of Finland's 7,000 Nordea employees will ultimately be pink-slipped.

Earlier this week, Nordea reported operating profits of around €1 billion ($1.2 billion), down 5 percent from the same period last year. Following the layoff announcement, Nordea's shares fell 15 percent, Swedish newspaper Norrköpings Tidningar reported.

​Originally formed in 1995 through the merger of Finland's Merita Bank with Sweden's Nordbanken, Norway's Kreditkassen and Denmark's Unibank, Nordea operates in 19 countries around the world, serving 11 million private and 700,000 corporate customers.