In the next five years, the bank expects to reduce its workforce by around 5,800 workers, mostly in Belgium and the Netherlands, out of approximately 52,000. This will result in costs savings of around $1 billion by 2021, the bank noted in the release, which reproduces a recent speech by CEO Ralph Hamers.
The bank will invest most of that money — around $892 million — in digital transformation, as well as expanding its presence in five markets: Austria, the Czech Republic, France, Italy, and Spain. It will also make a digital push in Germany, where last week, Commerzbank announced it would cut around 9,000 jobs.
Another 1,200 jobs will be “affected” by the digital transformation in coming years. In total, this represents more than 10% of the bank’s staff, and includes 950 vendor positions outside the bank proper.
A January report about the ‘Fourth Industrial Revolution’ from the World Economic Forum noted that technological advances could erase 7 million jobs by 2020, but would also add about 2 million jobs in the fields of computer science, mathematics and engineering. (Hear that, kids?)
Any Industrial Revolution will lead to job losses in some areas and gains in others, analyst Patrick Moorhead told Computerworld:
“If you have sensors and wireless communications on your gas meters, you don’t need as many people checking those gas meters,” he explained. “But you need people to monitor the sensors and to design and develop the systems that do that.”
In the U.S., significant job losses at banks have tended to come as a result of branch closures, and it has been less clear that cost savings will be plowed into digital innovation, which would presumably benefit the end consumer. Forrester reently predicted a whopping 6% of all jobs in the U.S. would be lost by 2021.
Here’s Hamers again, from the release:
At the same time, we will add colleagues in parts of our business where we expect to accelerate growth given our plans to continue to attract new customers and increase lending to support the economies we are active in. Regrettably, the steps and intentions announced today would mean that a significant number of colleagues would have to leave ING. Because of the work we have done in recent years, we are able to take these intended measures from a position of strength. This enables us to do our utmost to build on our track record of helping colleagues who are affected to find new job opportunities.
The job losses are difficult, but ING’s plans are positive and ambitious. It seems safe to estimate that the year 2020 will see many thousands of fewer bankers across the world. ING has assets totaling around $1.2 trillion.
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