Scotiabank to cut 1,500 positions worldwide

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TORONTO – Scotiabank (TSX:BNS) warns that it’s cutting the equivalent of 1,500 jobs company-wide — about two-thirds of them in Canada and one-third at its international operations — as a cost-reduction move.

The bank is also recognizing a number of changes to estimates and taking additional provisions for credit losses.

In total, Scotiabank expects to recognize $341 million of items in the fourth quarter ended Oct. 31 that will reduce its diluted earnings by 28 cents per share.

About $148 million of the fourth-quarter provisions will be related to severance or restructuring costs.

Scotiabank says the downsizing will affect people at all levels of the organization and include the closure of about 120 branches at its international division.

It expects to reduce annual costs by $120 million through the exercise but the full benefits won’t be seen until its 2016 financial year, which begins next November.

1 COMMENT

  1. 1500 jobs is about 2% of the total Scotiabank workforce. I acknowledge that there is more cost to retaining employees than their salaries alone (utility expenses, insurance premiums, taxation, etc.). Nevertheless, I see an alternative that could save 1500 jobs. Rather than requiring a 100% payroll sacrifice from those who are terminated (after payouts, etc.), a 2% across-the-board payroll reduction for all employees could be imposed. So, (as an approximation) there can be a 2% payroll sacrifice from 100% of the employees, or a 100% payroll sacrifice from 2% of the employees. Employees in branches that are closing could transfer to other locations, or telecommute, or opt for resignation (with severance). What do you prefer?

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