SocGen to cut jobs after tough quarter
Societe Generale plans to cut as many as 700 jobs in Paris and eliminate hundreds more positions in London and New York after experiencing a difficult first-quarter in investment banking, people with knowledge of the matter said.
The French bank is speeding up staff reductions at its headquarters after tough trading conditions persisted into the new year and may announce the cuts as soon as next week, the people said, asking not to be identified as the matter is private. Bruno Benoit, head of the key fixed income and currencies trading unit, is among high-profile executives to leave the firm, they said.
The Paris-based lender is slashing $567 million of costs and reviewing less profitable investment-banking activities after surprising investors with a profit warning because of a market rout. UBS CEO Sergio Ermotti last month warned that the first quarter was one of the worst environments in recent history, while SocGen has said it sees no near-term improvement in market conditions.
SocGen shares extended losses, falling about 1.2% as of 4:34 p.m. in Paris trading. They’re down about 4% this year, missing a rebound in the Europe Stoxx 600.
SocGen said in February that reductions would focus on some fixed-income and currencies activities. Jean-Francois Gregoire, the new head of SocGen’s global-markets business, has taken over Benoit’s functions at least on a temporary basis, the people said.
SocGen declined to comment.
SocGen’s global banking and investor solutions unit has more than 20,000 employees. One of the bank’s main French labor unions said Feb. 8 that the bank is bracing for significant cuts to trading jobs. CEO Frederic Oudea has said it’s too soon to comment on any headcount decisions.
Oudea reorganized his top management and hired senior traders from Bank of America last year to help reboot the global-markets business after the shock departure of investment-banking boss Didier Valet. Deputy CEO Severin Cabannes is now in charge of the GBIS unit and is readjusting a business plan that was crafted under Valet in 2017, when economic and market conditions were better.
The revamp is crucial for Oudea. After more than a decade in the CEO position, he is trying to strike a balance between cutting about $9 billion of risk-weighted assets in global-markets activities and preserving the bank’s leadership in equity derivatives. Despite the headwinds, SocGen is buying Commerzbank’s equity-markets and commodities activities.
SocGen’s board last year took the step of proposing a new four-year term for the CEO, and shareholders will vote on it at their annual meeting in May.