France's Natixis to Axe Around 700 Jobs

French corporate and investment bank Natixis is reportedly planning to axe 500 to 700 employees, with a voluntary removal scheme, following the impact from tough new regulations and the eurozone sovereign debt crisis.

The departure scheme will be negotiated with unions in September this year after a raft of talks began between the two parties in June. An internal meeting is scheduled for 2 September to discuss various plans, says the Journal de Dimanche.

The French lender also aims to present a new strategy plan in November this year including a reshuffle across various departments.

"Several departments will be reorganized at Natixis. There will be a lay-off plan before the end of the year," said the paper, quoting an unnamed union source.

Pressure to Shore Up Cash

Banks are under significant pressure from US and European regulators to shore up cash amid changing capital requirement rules. This means that banks need to make sure they have a certain percentage of cash on its balance sheet to satisfy new regulations that are aimed at making the financial system safer from another collapse.

Slashing headcount is one of the key ways in which banks have been able to reduce spending and bolster savings.

According to the report, Natixis is aiming to encourage some of its employees to take an early retirement rather than firing them.

In 2009, a number of senior employees left the bank after Natixis formulated a restructuring its first major restructuring plan. The bank has reportedly decided not to make any forced redundancies for three years. Redundancy allowances are limited to thirty-two months' salary and € 250,000.

Natixis said on February that it would shed 20% of its stake in BPCE, a network of cooperative lenders which controls the bank, in order to simplify its business.

The French lender posted 18% increase in the first quarter profits to €337m in May. The bank will announce its second quarter result on 6 August.