National Bank cutting 600 jobs as part of digital shift

National Bank announced Thursday it will eliminate about 600 jobs as it aims to speed up its transition to the growing digital economy.

At the same time, the Montreal-based bank said it will hire about 500 people, especially in sales and service and information technology functions.

"The shift to a digital economy offers tangible growth opportunities for National Bank, but requires us to remain agile and efficient in fully meeting client expectations," National Bank president and CEO Louis Vachon said in a release. "Our clients' habits are changing, and our services need to change with them."

The smallest of Canada's big six banks, National said reassignments and early retirement programs will be implemented over at least one year that will affect another 300 employees on top of the 600 positions being eliminated.

The bank said it will take a $175-million charge to its fourth-quarter earnings to cover employee severance and "premises optimization."

National said it expects the cuts will lead to roughly $120 million in annual pre-tax recurring savings.

About 70 per cent of the job cuts will be in Quebec, with about 50 people laid off each month, starting on Tuesday, National said.

Company spokesman Claude Breton said clients are visiting branches less frequently and seeking more digital services.

He said the bank is focusing on digital services and that could mean such things as offering financial advice on Skype, and hoping the digital shift will help it gain customers in Western Canada without having to open branches that can take a decade to become profitable.

National is the latest bank to announce job cuts. In late September, Laurentian Bank said it was cutting 300 positions as it merges 50 branches over the next 18 months. BMO, Scotiabank, TD and CIBC have also restructured to focus on their mobile and online offerings.