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Mitsubishi May Cut 10,000 Jobs over a Decade to Reduce Costs
For the first time since its foundation, Mitsubishi UFJ Financial Group, Inc. is planning to lay off about 10,000 employees. The news was reported by Bloomberg, citing people familiar with the matter.
Most of the headcount reduction is expected to take place in Japan over a period of 10 years. The Tokyo-based bank is planning such a major restructuring move to cope with the challenges prevailing in the Japanese economy. Central bank’s negative interest rate policy and intense competition is keeping the Japanese banks under pressure, leading to a fall in profits.
Mitsubishi is aiming to deal with these problems by shutting down its branches and also investing more in digital initiatives. These steps are expected to help it overcome higher costs and compete with its peers.
A couple of U.S. banks that are also cutting jobs to combat escalating expenses are Bank of America Corporation (BAC - Free Report) and Wells Fargo (WFC - Free Report) . On the other hand, Deutsche Bank AG (DB - Free Report) is hiring employees in order to boost its wealth management unit.
While Mitsubishi’s performance is affected by increasing expenses and negative rates, it benefits from global expansion plans and a strong liquidity position. We also remain encouraged by its capital strength.
Shares of the company have gained 39.1% over the last one year, outperforming the Zacks categorized Banks - Foreign industry’s rally of 23.5%.
Mitsubishi’s earnings estimates for the current year remained stable over the last 60 days. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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