Layoffs at Société Générale: a hidden redundancy plan?

That’s the question unions have been facing after the sharp increase in layoffs made by the investment bank this summer...

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With a rate of forty monthly layoffs between July and August against fifteen usually, primarily in corporate and investment, Société Générale seems to follow its competitors, which have massively reduced their workforce for three months, but without any communication.

This could raise unions’ concerns as they have not been informed of any layoff plan. Several union members have also said they were considering legal confrontation. « If they say there is nothing and continue to fire by dozens, we will go to court and claim they carry out dismissals to avoid the charge of a social plan for economic reasons”, said a union source to Reuters.

In addition, some employees would be driven to fault or quit, especially within the merger and acquisition activity, led by Thierry d’Argent. “In 2010, I contributed up to 10% of the revenues of the division and I got the same bonus as the less effective ones” says one of them. “Management has clearly done everything it could to discourage me and force me to leave”.

In other CIB’s business units in trouble, some executives were purely and simply pushed out with offered severance pay. "On my return from vacation, the management offered me a compension in exchange of my departure, trying to convince me that a successful legal action was not likely and would not necessarily lead to a compensation amount up to my expectations "said one employee of the bank.

Management totally denies the case of a social plan, but rather a stabilization of the workforce in a deteriorated market environment.

“It would be better for Société Générale and BNP Paribas to send clear and transparent messages to the markets; it is mainly what is lacking in the French banks” says an Anglo-Saxon london-based strategist following French banks. “With the steep decline in their value, who could blame them if they announced substantial layoffs today? They should take this opportunity to increase profitability as soon as growth resumes”, he adds.

Next Finance September 2011

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