U.S. Bank to cut thousands of branch workers in digital push
U.S. Bancorp is eliminating thousands of branch workers as it adjusts to changing customer preferences, according to a person briefed on the decision.
The cuts will be in the low thousands, the person said, asking not to be identified because the number isn't public. In a memo seen by Bloomberg, Chief Executive Andy Cecere said U.S. Bancorp "made the difficult decision to eliminate their jobs because customer behaviors have changed." The total represents less than 2% of the bank's workforce, according to spokeswoman Molly Snyder. The company had 74,000 workers as of Oct. 16.
Reductions are being made across the firm. Some job categories, including teller coordinator and assistant branch manager, are being eliminated or will have headcount greatly reduced. None of U.S. Bank's roughly 3,700 branches will be closed as part of the moves, according to Snyder, who confirmed the contents of Cecere's memo and declined to comment on the number of cuts.
The Minneapolis-based firm will also create some new customer-focused positions and launch a training program so existing employees can widen their skill sets, the memo said. Snyder said the firm will begin hiring client-relationship consultants and business-banking development consultants among other new roles to work in the branches.
Banks have for years been reassessing the role of branches in their strategies as customers increasingly handle their finances online. U.S. Bancorp has said it plans to lean heavily on digital offerings and enter new markets with a "branch-light concept." Earlier this year, the firm hired Derek White from Banco Bilbao Vizcaya Argentaria SA as chief digital officer to boost innovation.
A McKinsey & Co. study released Monday said banks are heading "into an arms race on technology" as new competitors like fintech startups try to take market share. Financial services incumbents need to take dramatic action to fund innovation, or risk being left behind, the report says. Banks allocate just 35% of their information technology budgets to innovation, while fintechs spend more than 70%, McKinsey said.