(Bloomberg) -- Banco Santander (MC:SAN) SA’s U.K. unit will shut 140 branches and lay off around 800 staff, arguing that the use of digital and mobile banking by its customers increasingly makes physical offices obsolete.
The office closures will affect 1,270 staff, of whom Santander hopes to redeploy about a third. The Spanish lender plans to spend 55 million pounds ($71 million) refurbishing 100 of the remaining branches over the next two years as it moves toward a combination of larger sites serving customers and local businesses and smaller branches deploying more use of the latest technology.
“The way our customers are choosing to bank with us has changed dramatically in recent years, with more and more customers using online and mobile channels,” Susan Allen, head of retail and business banking, said in a statement. “We have had to take some very difficult decisions over our less-visited branches.”
High-street banks have been clamping down on costs, shutting branches and eliminating jobs as customers move online. LLoyds Banking Group Plc and Royal Bank of Scotland Group (LON:RBS) Plc have cut thousands of jobs in recent years amid fierce competition, with tight margins and the cost of complying with regulations eroding profits. In Spain, CaixaBank SA is seeking to cut thousands of jobs and close hundreds of offices to keep costs under control.
Once this round of cuts is completed, Santander expects the size of its network to remain stable for the foreseeable future, Allen said.