Danske Bank has discontinued 400 positions across the Group, primarily within staff and back-office functions, with 230 being laid off as a consequence of the need to reduce costs. The discontinuation of positions is part of Danske Bank’s 2023 plan, which in addition to significant cost reductions among other things also entails considerable investments in increased digitization.
The bank has let go 120 employees in Denmark, 60 in Finland, and 44 in Lithuania. As previously announced, 60 employees in Denmark will also leave their positions under voluntary redundancy agreements in the coming months. Customer-facing units are not affected by the discontinuation of positions, except for Finland where retail banking is being reorganised. Further, Danske Bank’s compliance functions are not affected.
Karsten Breum, Head of HR at Danske Bank, commented:
“Today, we are discontinuing 400 positions across the Group, and we are taking a number of initiatives to adjust and simplify parts of our organization. It has not been possible to find new jobs for all affected employees, which means we are laying off approximately 230. It is not easy to say goodbye to skilled and dedicated employees, but, regrettably, it is a necessary part of our efforts to reduce costs in order to ensure that we remain competitive. We are looking at all costs across the organization. As part of our efforts, we also have to look at the number of employees. This is why we introduced a hiring freeze last year and offered voluntary redundancy agreements in certain parts of our organization in Denmark in January.”
The 2023 plan aims to achieve a bank where more than 90% of employees should be “engaged” (as measured in our Employee Engagement Index) and that is among the top two on customer satisfaction in everything it does.
Danske Bank will work to achieve a return on shareholders’ equity of 9-10% and a cost/income ratio in the low 50s by continuously improving the profitability level – leveraging our full potential. Unchanged dividend policy of 40-60%. To support its ambitions to develop its business in the period towards 2023, the bank will, among other initiatives, invest considerably in further digitization of core processes across the bank and extensive simplification of our products, operations, and processes. The planned investments will have a significant effect on the result for 2020, for which it expects a return on shareholders’ equity in the range of 5-6%.
