Scotiabank of Canada plans to reduce its global workforce by approximately 2,700 employees, or about 3% of its total workforce. This layoff is a result of the difficult economic environment, and it is one of the largest among Canadian banks. Other Canadian banks, including the Royal Bank of Canada and the Bank of Montreal, have reduced their workforces due to rising costs in a high-interest-rate environment.
The layoffs are a result of changing customer banking preferences as well as the bank’s efforts to modernize and automate certain processes.
Scotiabank anticipates restructuring and severance costs of approximately C$247 million, C$63 million for consolidating and exiting certain locations and service contracts, and C$280 million in impairment charges related to its investment in China’s Bank of Xi’an. Scott Thomson, who took over as CEO in February, made leadership changes in August as part of a larger, strategic overhaul that will be revealed at the bank’s upcoming investor day in December.
Scotiabank, which had approximately 91,000 full-time employees as of July 31, expects its fourth-quarter results to be impacted by approximately 49 Canadian cents per share and a 10 basis point reduction in its common equity tier 1 capital ratio.