Intesa Sanpaolo to cut 9,000 jobs in AI-fueled push

Intesa Sanpaolo is planning to cut 9,000 jobs by 2027 — roughly 10% of its workforce — and hire 3,500 “young people” to support greater use of artificial intelligence and further digitalization, the bank said Wednesday.

Italy’s largest lender will offer exit packages to its entire Italian staff — including managers — with the aim of persuading 4,000 employees to retire early or access the European Union’s Solidarity Fund, in a plan negotiated with trade unions, the bank said.

Further, Intesa said it would cut another 3,000 Italy-based roles by 2027 — and 2,000 more at its international units — by not replacing people who leave or reach pension age. The foreign cuts would be to roles supporting central functions, not “commercial” ones, the bank said.

The moves are expected to save the bank €500 million ($540 million) per year in personnel expenses, beginning in 2028, Intesa said, adding that the bank will book a charge of around €350 million, net of tax, in this year’s fourth quarter.

Among the bank’s 3,500 new hires, 2,000 are expected to replace the 4,000 lost to early retirement, banking union FABI said, according to Reuters. The other 1,500 additions will be on “hybrid” contracts — working part time for the bank and the rest of the time as consultants. Those roles will focus on boosting sales of the bank’s wealth management and insurance products, the bank said.

The hires, expected to be in place by June 2028, are meant to “[accelerate] the process of generational change in the context of the technological transformation [to] a resilient business model in the digitalization and artificial intelligence scenario,” Intesa said Wednesday.

Intesa is hardly the first Italian lender to anticipate AI-related staff changes. Its rival, BPER Banca, said this month that it, too, would cut its workforce by about 10%, partly because of a boost in productivity that would accompany the use of more AI tools, Bloomberg reported.

Nor is Intesa the only Italian bank to negotiate an early retirement plan this month with unions: UniCredit, the nation’s second-largest bank, hatched an agreement this month to shed 1,000 employees, while committing to hire 500 new branch workers, according to Reuters.

“With today’s accord, we’ve provided initial answers to help workers facing the digital transformation that will reshape banking in the coming years,” Paolo Citterio, a FABI representative within Intesa, told the wire service. A new committee has been created to monitor the impact of growing digitization on Intesa’s operations, Citterio added.

Intesa’s upcoming staff changes come in addition to a drawdown it already announced — namely, that it would shed 9,200 roles between 2022 and 2025 and replace them with 4,600 hires.

Under that business plan, the bank increased its digital investments while looking to cut retail banking costs. But closing branches has been tough in Italy, where an older clientele leans on the bank’s brick-and-mortar footprint.

Italy’s competition regulator last year forced Intesa to halt an automated migration of thousands of customers to its online-only Isybank unit without their consent. 

Intesa CEO Carlo Messina has pledged to boost the bank’s profitability by slashing costs, and doubling down on insurance, asset and wealth management for the units’ fee income in the face of falling interest rates. 

For its part Wednesday, Intesa emphasized it still anticipates net income of more than €8.5 billion for 2024.