UniCredit, Italy's largest lender, has announced that it will cut 5% of its workforce in order to reduce costs across its business.
UniCredit has unveiled a three year plan showing how it intends to integrate Germany’s HVB Group which it acquired last year, giving the company more than 28 million customers in 19 European countries. The Milan-based group will make around 12,000 job cuts, although this will be offset by hiring 5,000 new staff, mostly in Russia.
The cuts are expected to be made in the bank’s central and eastern European operations as part of an efficiency drive from Unicredit’s chief executive Alessandro Profumo. The bank plans to lift profit by 27% a year through the staff cuts, increasing sales to existing customers and by selling assets.
The lender also said that the costs associated with integrating HVB will not be as high as expected. The company will spend E1.25 billion on early retirement bonuses, relocation expenses and other costs associated with the purchase. UniCredit projected that revenue will rise 8% a year through 2008.