BBVA plans to lay off up to 5,000 Sabadell employees
The hostile takeover of BBVA Banco Sabadell this week shook the foundations of the Spanish banking sector, as the organization chaired by Carlos Torres reported it to the CNMV on Thursday. After the giddiness caused by the unexpected move taken by BBVA, the numbers prevail and make clear what the banking giant that will emerge from the merger will be like. At a press conference held to explain the operation, the president of the organization limited himself to highlighting global figures that support his decision to go ahead with the merger, despite Sabadell’s refusal, since it would mean the creation of a financial giant with a capital of 986,924 million euros. by assets, which would put it second in Spain after CaixaBank and third bank in Europe after BNP Paribas and Santander, with a capitalization of about $70 billion. Together they would have earned more than $2.5 billion in the first three months of the year. In addition, the company will have nearly 135,500 employees and a network of 7,115 offices.
And it is at this moment that the first alarm bells ring out, as both the workforce and the number of offices will be reduced. Carlos Torres himself admitted this when he stated that “at first there will be layoffs, but always through dialogue and without traumatic measures.” All analysts and experts consulted by LA RAZON agree that “it is a simple matter of efficiency and duplicity, as happens in operations of this type. The banking sector has undergone major restructuring over the past decade and will continue to do so. In this case, they will be reduced by a proportion that is yet to be determined.
Both teams will see changes as a result of this merger, but Sabadell’s team will suffer the biggest loss. According to the latest data for 2023, the Alicante-based bank will provide the new enterprise with a staff of 19,213 people, of which 13,441 in Spain, and 1,414 offices. According to the same sources, at least a third of its workers will have to leave, equivalent to 4,000 to 5,000 employees. And BBVA will also absorb some of the outflows, Torres said. “We will be a group with great potential, with great opportunities for professional growth based on competition and merit,” he said.
As for the affected branches, analysts have more doubts as it will depend on the commercial strategy the new corporation wants to follow, but at least 400 will close, although other sources suggest the figure could rise to 600.
The last major merger in the Spanish financial sector – friendly and with government approval – was the merger of CaixaBank and Bankia in September 2020, which was formalized the following March and gave birth to the banking giant that today leads the sector in Spain. In July 2021, an ERE was agreed which affected 6,542 people and was fully covered by voluntary redundancies, early retirement from age 52 and no compulsory redundancies. Of course, the company had to incur expenses to its treasury in the amount of $1.884 million.
BBVA CEO Onur Genç had already warned at the same press conference that “scale is becoming increasingly important for commercial banking. And this is because fixed costs are increasing every day. The head of the bank gave the example of digitalization, which “although it reduces operating costs, is a fixed cost, since it is necessary to have an application with the same functions regardless of the number of clients.” In the same sense, Torres clarified that “extra efforts must be made” to ensure that the commitment to “creating value” is perceived by all the territories in which Sabadell operates, “and any decision taken will always be based on consensus and dialogue.
But the trade unions do not believe in this. Both CC OO and UGT have these days demonstrated their “extreme concern” about the possible employment impact of the takeover at a time when “more people working in banks are needed to accelerate generational change in the sector.” While the number of workers likely to be affected by this new merger is unknown at this time, unions have already warned that they will not take enforcement action, “especially now that both companies have reported record profits” for 2023 and the first quarter 2024 “We won’t let workers always pay for mergers.”
The government has also demonstrated its opposition to this operation and its concerns about the labor consequences of this merger, especially the Minister of Labor Yolanda Diaz, who warned the education president that the move to concentrate banks will cause “very harmful consequences for the economy because it will cause serious harm to employment and the economy families. “We will not allow workers to always be paid again.”
There were also voices from the PP side against the merger and job losses, especially from the Valencian Community. Its president, Carlos Mason, believes the operation “destroys value, work, territory and competition” and, moreover, goes “against Alicante,” in whose capital the bank is headquartered and employs 500 people. Sabadell, whose jobs will be at risk as BBVA has confirmed that its headquarters will move to Sant Cugat del Valles.
The National Securities Market Commission (CNMV) will analyze the complaint filed on Thursday evening by Banco Sabadell regarding the information provided by BBVA this Thursday about its takeover bid. Sabadell sent a message to the CNMV saying that the transaction documentation provided by BBVA and the information offered at the meeting with analysts violated takeover bid legislation and “introduced incomplete data that could affect the market.”
Sabadell’s intention is for BBVA to inform the market of the identity of the relevant shareholders who, as the company’s president, Carlos Torres, said the day before yesterday, would clearly show their interest in participating in the hostile takeover proposal formulated by the bank. Basque origin. In any case, it is an operation whose outcome will not be known, Torres confirmed, for six to eight months and will not be completed until more than a year has passed. The “war” in banking has been going on for a long time.