January 4, 2012 / 6:10 PM / 6 years ago

UPDATE 2-SocGen mulls 880 investment bank job cuts

2 Min Read

* Cuts follow management shakeup at investment bank

* SocGen had already set 700 job cuts in U.S., Asia

* BNP and Credit Agricole also laying off investment bankers

By Christian Plumb

PARIS, Jan 4 (Reuters) - Societe Generale plans to cut some 880 jobs at the French unit of its investment bank as part of a "voluntary departure plan," it said on Wednesday, as it and rivals struggle through a liquidity crisis.

The layoffs represent roughly 7.3 percent of the payroll of SocGen's investment bank, which has been forced to scale back its global ambitions as the euro zone's troubles worsened.

The job cuts follow the bank's move last month to replace its chief financial officer and the head of its investment bank. The layoffs are the latest in a series of job cuts by French banks in particular and lenders worldwide hit by market turmoil and tougher capital rules.

SocGen, which has been one of the European banks hardest hit by a short-term funding crunch that has forced it and rivals to dramatically scale back on risk, had previously set plans to cut 700 jobs at its Asian and U.S. operations.

Domestic rival Credit Agricole said last month it was cutting 2,350 jobs at its investment bank, while larger competitor BNP Paribas said in November it would lay off 1,396 at its corporate and investment bank, or 6.5 percent of the division's staff.

Societe Generale shares have fallen 58 percent over the last 12 months as regulators raised capital requirements and liquidity has dried up.

"The plan will be based on voluntary departures and will give priority to internal mobility within the group," the bank said in a statement, adding that the cuts would be implemented -- after consultation with unions -- starting in April 2012.

France's No. 2 bank by market capitalisation, which has had to scrap its dividend to bolster loss-absorbing capital, said its retail bank would be unaffected by the cuts. Its investment bank employs some 12,000 worldwide.

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