PARIS (Reuters) - France’s Societe Generale plans to cut about 600 jobs at its investment banking unit in Paris and a few hundred more in London and New York, a source at the bank said on Friday.
SocGen’s Chief Executive Frederic Oudea said two months ago the bank would cut costs by 500 million euros ($561 million) at its corporate and investment banking business after the unit’s profits fell by more than half in the fourth quarter.
The bank intends to shift its focus to activities such as equity derivatives, scaling back its fixed-income, currencies and commodities business.
SocGen management is due to meet with union representatives to discuss a plan early next week, the source said.
“The job cuts will be carried out through voluntary departures,” a union representative said on Friday.
“This would affect corporate and investment banking jobs as well as people working for dedicated support functions,” the representative added.
A bank spokesman declined to comment.
SocGen Deputy CEO Severin Cabannes, who oversees the corporate and investment banking unit which employs 18,000 people in 30 countries, said in February the restructuring plan would likely include job cuts, but he said it was too early to evaluate how many.
In February, the bank fired its head of trading, Frank Drouet, replacing him with Jean-Francois Gregoire, the deputy chief risk officer.
After years of low interest rates curtailed returns for retail banking, SocGen, BNP Paribas, Deutsche Bank and other big European banks have relied on the more volatile earnings from corporate and investment banking.
Although shares of other major European banks have bounced back this year, SocGen shares are still down three percent. The stock has lost 39 percent over the past 12 months.
Oudea, who lowered the bank’s profitability targets on Feb. 7 for the third time since he took the helm in 2008, is under pressure from investors and has said the bank will sell more assets than originally planned, mainly in Eastern Europe, to boost the bank’s equity ratios.
The board has recommended shareholders vote in favor of a new four-year term as CEO at a general meeting next month.
Reporting by Matthieu Protard and Inti Landauro; Editing by GV De Clercq and Kirsten Donovan