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Nordea still likely to hire in the front office despite redundancies

It may sound grim, but Nordea’s move this week to cut 2,000 jobs from its workforce may not materially affect the bank’s appetite to take on higher level and talented bankers, according to industry observers.

The bank on Monday said it intended this year and next to reduce its headcount by 2,000, from its global total of 34,000, with between 500 to 650 jobs expected to go in Denmark, Finland and Sweden respectively and 200 to 300 in Norway.

The move followed a somewhat cryptic warning in its results in July that the bank would “implement plans to contain cost growth in the later part of 2011”.

“By initiating measures to increase profitability early, we safeguard our good rating, competitive funding and thus our ability to offer products and services at the right price to our customers. The alternative – to wait and see – is not an option,” said president and chief executive Christian Clausen.

It is not precisely clear yet where the axe will fall, and may not even become apparent until complex negotiations with the banking unions have been concluded, probably in November, argues Rune Kibsgaard Sjhelle, Nordea head of external communications.

“What we are saying is that we have now started negotiating with unions, negotiations around the sorts of numbers but also around what agreements can be made. We are trying to do as many of these reductions as possible on a voluntary basis so it is too early to say exactly where the reductions will be made,” he explains.

“We are trying to look at all departments to see what we can go forward, but it is too early to say what will happen where,” he adds.

Nevertheless the expectation is that the main cuts will be within retail, administration and support roles rather than front-line banking positions, predict recruiters.

“To an extent it may not even be that noticeable because the bank will, I am sure, continue to recruit, especially into specialist roles,” says one.

But some also remain worried what this could mean for the bank’s image as a financial services employer of choice going forward.

“The big issue is the signal this is going to send out. Even if there are still junior banking vacancies available, will people feel less likely to want to go and work there?” cautions another.

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