ING Groep NV, the Netherlands' largest financial services company, today said that it plans to cut around 5,800 jobs in Belgium and the Netherlands over five years and invest in digital platforms in order to save cost by €900 million ($1 billion) by 2021.
The announcement comes just a few days after another European bank, Commerzbank, Germany's second-biggest lender, said that it plans to cut 9,600 jobs over the next four years and suspend dividend payment amid low interest rates and shift to online banking. (See: Commerzbank to cut 9,600 jobs, suspend dividend payment)
ING, which had 51,833 employees at the end of June, will cut about 2,300 jobs in the Netherlands and about 3,500 in Belgium.
The total number of job cuts will be around 7,000 since nearly 1,000 are expected to come at suppliers rather than the company itself.
The Amsterdam-based lender said that it will invest €800 million in continued digital transformation in order to further accelerate growth in primary customers and lending.
"It is inevitable that the various measures and intentions announced today may have a significant impact on many of our colleagues. It means some functions will change significantly in nature. It might mean that the location of functions will change. And it might mean that positions will no longer be there in the future. All-in-all, over the coming five years, around 7,000 functions might be impacted by these effects, including 950 positions employed by external suppliers," said ING CEO, Ralph Hamers.
"Regrettably, the steps and intentions announced today would mean that a significant number of colleagues would have to leave ING ……….. For the intended workforce reductions, a pre-tax redundancy provision of around €1.1 billion is expected to be booked, of which €1.0 billion in the fourth quarter of 2016," he added.
Although ING repaid the €10 billion bailout it received from the Dutch government during the global financial crisis in 2008, record-low interest rates and regulatory demands have forced the lender to cut costs.