Santander To Close 140 UK Branches, Lay Off 800

Banco Santander’s U.K. unit is gearing up to close 140 branches and let go of roughly 800 employees.

According to a report in Bloomberg, the move is being prompted by the company’s realization that customers are engaging more in online and mobile banking, reducing the need for physical offices.

“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 to Bloomberg. “We have had to make some very difficult decisions over our less-visited branches.”

According to Bloomberg, the moves will impact 1,270 employees, as Santander plans to redeploy one-third of the impacted staff. The lender is also planning to spend $71 million to refurbish 100 of the remaining branches during the course of the next 24 months. The aim is to have a combination of bigger sites, where customers and local businesses can access services and smaller branches that will be home to cutting-edge technology. Allen told Bloomberg that once Banco Santander completes its layoff and branch closings, it plans to maintain a stable number of branches for the coming years.

Banco Santander isn’t the only European bank that has been reining in costs, closing branches, reducing headcounts and focusing on redesigned branches. With competition fierce among banks, margins tightening and digital banking growing in popularity, the banks are in a cutthroat battle for survival.

Bloomberg noted that Lloyds Banking Group and Royal Bank of Scotland Group are among the U.K. banks to engage in layoffs in recent months, resulting in thousands of people losing their jobs. Meanwhile, in Spain, CaixaBank is looking to reduce its headcount by thousands and close hundreds of offices, noted the report.