BMO restructuring charge to lead to hundreds of job losses

CBC | BMO Release | Dec 3, 2019

BMO - BMO restructuring charge to lead to hundreds of job lossesBMO says restructuring charge to affect about 5% of global workforce, without offering specifics

The Bank of Montreal's fourth-quarter profit fell to $1.19 billion as it was hit by a restructuring charge related primarily to severance that will affect about five per cent of its global workforce.

The bank said Tuesday the quarter ended Oct. 31 included a $357-million restructuring charge as a result of a decision to accelerate delivery of digitization initiatives and simplification of the way it does business.

Part of reason for the move was lower margins from its personal and commercial banking business in the United States as a result of lower interest rates, as well as slower U.S. economic growth expected next year, officials said.

BMO didn't reveal details about where or when the job cuts will occur, but it had about 45,513 employees at the end of October. A five per cent cut suggests about 2,275 jobs would be affected.

Based on the geographic breakdown of BMO's workforce, the restructuring could affect roughly 1,500 jobs in Canada and 775 in the United States.

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Chief financial officer Tom Flynn said the efficiency initiatives announced Tuesday will provide annual savings of $200 million in its 2020 financial year, which began Nov. 1, and about $375 million by the first quarter of its 2021 financial year.

"I would expect the savings that we've talked about to flow through each of our businesses in a fairly representative way … both by operating group and by geography," Flynn told analysts on a conference call.

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