National Bank to cut 600 jobs, offer early retirements, other roles to another 300

MONTREAL – National Bank of Canada announced Thursday it is eliminating 600 jobs over the next year — nearly three per cent of its staff — and offering early retirements or other positions to another 300 workers as it tries to adapt to a technological shift in the financial services industry.

About 70 per cent of the job losses will be centred in the bank’s base in Quebec, with the rest scattered across the country. About 50 people will be laid off per month, beginning Tuesday, the bank said.

At the same time, the lender expects to fill 500 other positions over the same period, primarily in sales and service and information technology jobs.

President and CEO Louis Vachon said the bank needed to make difficult personnel decisions.

“We have the right strategies, talent, a shared vision and a clear and robust plan to pursue our vision,” he wrote in a memo to employees.

“However, in the current context, the bank must ensure its growth, not only by its revenues, but also by better controlling its spending.”

The layoffs come a year after National Bank, Canada’s sixth-largest by market capitalization, announced plans to eliminate 400 positions.

Other Canadian financial institutions, including Bank of Montreal, Scotiabank, Toronto-Dominion, CIBC, Laurentian Bank and Desjardins, are also restructuring their operations in part to improve their digital operations.

National Bank (TSX:NA) will look at trimming the size of its Montreal headquarters and its branches as it removes administrative and other traditional roles across various sectors, but has no plans to close locations, said spokesman Claude Breton.

“We’re adjusting to a new reality, which is where you see clients coming less often in branches and asking for more digital services,” Breton said.

The bank is focusing on improving digital services and that could mean offering financial advice on Skype, he said, citing one example. The company is also hoping its digital shift will allow it to gain market share in Western Canada without having to open branches that can take a decade to become profitable, he added.

The bank expects to take a restructuring charge of about $128 million after taxes, or 38 cents per share, in the fourth quarter of its financial year ended Oct. 31. It expects to realize roughly $120 million in annual pre-tax savings.

CIBC analyst Robert Sedran said restructuring charges have helped Canadian banks improve their operating performance by cutting costs.

“Given the importance of efficiency improvements in what we expect to be a modest top-line growth environment, all banks are sharpening their pencils on this file,” he wrote in a report.

According to its most recent financial report, National Bank had 19,860 employees in Canada and 1,871 outside the country as of July 31.

The company reports its annual financial results on Dec. 2.

Note to readers: This is a corrected story. An earlier version said half of the 600 jobs to be eliminated will come from retirements.