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SocGen IT staff face second big round of cuts in two years

Société Générale’s much awaited investor day, in which (relatively) new CEO Slawomir Krupa outlines his plans for the bank (and especially the investment bank) has finally arrived. And it is...Pretty disappointing, all in all. There are a lot of ideas, but relatively few plans.

One plan is pretty clear: the bank intends to implement €1.7bn of cost cuts, of which €600m or so will come from a significant overhaul of SocGen's IT systems. Krupa says these are out of date and prohibitively expensive, especially compared to the IT systems at some of SocGen's competitors.

Although the savings will be coming from moving to a “platform” system, there’s an underlying threat that jobs will go as part of those cuts. The last time the bank moved to a new IT platform was after a merger with a subsidiary, Credit du Nord, back in 2021. That led to 3,700 redundancies, said Computer Weekly, although that came in large part from closing physical branches.

This time around, some technology jobs at SocGen look safer than others. Krupa said today that the bank will continue to invest in cybersecurity (he plans to spend over €1bn between 2023-2026), and will continue migrating the bank's apps to cloud systems, either public and/or private, with a goal of over 75% by 2026.

As for the investment bank, Krupa doesn't seem to have many concrete plans. He said the investment bank will be moving to a “capital-lite” model and wants to move away from a mindset and culture of “balance sheet management optimization” and towards a “distribution-driven approach.” 

Krupa's also keen on partnerships. The bank’s recent partnership with Brookfield, in which the two have launched a €10bn private credit investment fund, starting with €2.5bn), is a model for the future. 

Fee generation was another catchphrase in the presentation. There’s also an emphasis on doubling down on business areas where SocGen is already strong  – such as going from a “top equity derivatives house” to a “top equities house”.

As Krupa summarized: “More advisory, more fees, less capital intensity.”

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AUTHORZeno Toulon Reporter
  • ph
    20 September 2023

    Yes, we'll do huge IT cuts - and then we'll try and figure out a strategy.

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