A French bank managed to get rid of 21,000 employees using gentle techniques
If you work for an American investment bank and it wants to cut costs, you may be called into a meeting with HR and then find your access to internal systems is removed.
If you work for a French bank and it wants to cut costs you might be paid your full salary to work part time or given a large voluntary redundancy payment and encouraged to go on your way. Or at least, this is what might happen if you work for SocGen.
💥Follow us on WhatsApp for news alerts.💥
SocGen didn't say anything about its infamously generous voluntary redundancy programme during today's strategy presentation. It did say that it's got rid of 21,000 people across the bank since 2023 and that it's done so using a combination of "natural attrition", "delayering" and cutting back on recruitment while retraining and redeploying its existing people instead.
Voluntary redundancy programmes aren't exactly natural attrition, but SocGen has a strong history of nudging people out the door. Last year, ten material risk takers at the French bank received $1m in each. This was only slightly less than the $1.2m average compensation that SocGen paid the 384 investment banking MRTs who remained employed.
In the past, SocGen has been known to run voluntary redundancy programmes offering one month's salary per six months' service, with minimum payments of €25k (or €50k for employees with more than five years' service). More recently the CFDT Union says SocGen has been offering an option of working 80% of the time on full pay for two years at most, and allowing people nearing retirement age to work 50% of the time on 75% on total compensation (including the past two years' average bonuses) for up to three years, too. Next year, it's supplementing this with "external mobility leave" giving people 75% of their pay for six months while they develop a project outside of SocGen.
It's a creative approach and it seems to be working well for the French bank. American banks may want to pay close attention. Bank of America is also attempting to shrink via natural attrition, but SocGen is the master of this art.
Not all SocGen's methods are popular, though. The French bank is also demanding that employees return to the office four days a week, thereby encouraging some people to resign.
Sometimes senior people leave unexpectedly. Francisco Oliveira unexpectedly wafted out of the markets business to pursue other opportunities in July. Oliveira had been co-head of markets and running SocGen's fixed income trading business. SocGen said today that it still has some big aspirations in this area, and wants to expand its fixed income franchise across derivatives, financing and credit.
Follow me on X. Follow me on LinkedIn.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Signal: sarahbutcher.22 Click here to fill in our anonymous form, or email editortips@efinancialcareers.com.
Bear with us if you leave a comment at the bottom of this article: comments are moderated intermittently by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. You must take sole responsibility for comments you post on this site. We will take reasonable steps to weed out anything that we consider to be offensive or inappropriate.
