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Italy's MPS reorganises to cope with staff exits but unions unhappy

Stock Markets Nov 28, 2022 12:33
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© Reuters. FILE PHOTO: View of the logo of Monte dei Paschi di Siena (MPS), the oldest bank in the world, which is facing massive layoffs as part of a planned corporate merger, in Siena, Italy, August 11, 2021. REUTERS/Jennifer Lorenzini/File Photo

MILAN (Reuters) -Italian banking unions on Monday voiced concerns at a reorganisation being implemented by state-owned lender Monte dei Paschi di Siena as it prepares for the departure of thousands of staff from this week.

Monte dei Paschi this month raised 2.5 billion euros ($2.6 billion) in cash, braving stormy markets with a new share issue, with more than a third of the proceeds being earmarked to help fund staff exits and boost profits thanks to lower costs.

As of Dec. 1, the Tuscan bank will lose a total of 4,125 employees -- roughly a fifth of its workforce -- who opted to take advantage of a generous early retirement scheme.

After a failed re-privatisation attempt last year, Monte dei Paschi is working to improve its appeal for a potential buyer under new CEO Luigi Lovaglio so as to allow the state to cut its 64% stake in a merger deal with a stronger rival.

A key plank of Lovaglio's efforts to lift profitability is voluntary staff cuts which will allow MPS to save more than 300 million euros a year from 2023.

The unions said they had not seen eye to eye with the bank over the organisational changes and would continue to discuss arrangements and seek re-training for the staff.

"We believe we need to keep discussions going both centrally and locally to manage the impact on staff in terms of workload, organisation, training and operational risk management," the unions said in a joint statement.

Monte dei Paschi had no immediate comment.

Lovaglio said when he presented quarterly earnings that Monte dei Paschi had carefully planned the transition so that revenues would not suffer.

($1 = 0.9626 euros)

Italy's MPS reorganises to cope with staff exits but unions unhappy
 

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