Although most banks have been going through cost-cutting programs, recent events have proved those to be insufficient in dealing with a crisis. One of the banks in trouble is Societe Generale which is rumored to cut at least 200 jobs in United States divisions.
Sources close to the bank’s management say that due to the Europe’s debt crisis, Societe Generale is forced to make efforts in order to become leaner. Bloomberg says that at least 200 people are affected by the decision and “cuts may amount to 10 percent to 20 percent of the firm’s 2,000 workers in its U.S. corporate and investment bank”.
At the moment, as stated by Societe Generale Chief Executive Officer Frederic Oudea, the French bank is going through an intensive change, which is supposed to save up 4 billion euro ($5.4 billion) by 2013. Societe Generale also has plans to cut about 2,000 jobs next year in the Russian retail-banking business.
The plan is to sell assets and pare costs in an attempt to build investors’ confidence that the bank is not affected by the debt crisis. But this year the bank has dropped 55 percent. During the past five months alone, Societe Generale lost more than half of its shares value.
James Galvin, spokesman for the bank, said: “As announced in September, Societe Generale is in the process of scaling down a certain number of corporate and investment-banking businesses adversely affected by regulation, structural changes or with low cross-selling potential”
Bloomberg talked to Naseem Haffar, who was hired as U.S. head of loan sales and trading in March 2010 and was recently fired. Haffar explained the context: “The bank is going through some changes right now because of the European situation and as part of that they are cutting down on some businesses”.
Naseem Haffar was hired by Societe Generale to help with the bank’s intention to expand the U.S. loan sales and trading business. Previously, Haffar worked as a managing director in credit sales at JPMorgan Chase & Co. in New York.
According to data compiled by Bloomberg, this year financial firms have cut more than 200,000 worldwide, as opposed to 58,000 last year and 174,000 in 2009.