Toronto-Dominion Bank, Canada’s second-largest lender, has reportedly undertaken a restructuring plan that includes a 3% reduction in its workforce.
The job cuts will be implemented through attrition as well as targeted reductions, with over 3,000 positions expected to be affected, Bloomberg reported Thursday (Nov. 30).
Toronto-Dominion Bank (TD Bank) took a C$266 million (about $195 million) after-tax restructuring charge in the fiscal fourth quarter to cover the costs associated with these staff reductions and a reduction in office space, according to the report.
The restructuring will generate C$400 million in savings for the current fiscal year and C$600 million annually, the report said.
“We’ve undertaken a restructuring program to streamline and deliver efficiency, to create capacity to invest in the future,” Toronto-Dominion Bank Chief Financial Officer Kelvin Tran told Bloomberg.
Toronto-Dominion Bank’s shares slipped 1.8% following the announcement, per the report. However, analysts believe that the bank’s restructuring program will have positive long-term effects, boosting forward consensus estimates.
The bank also warned that meeting its medium-term earnings targets for fiscal 2024 will be challenging, according to the report. Toronto-Dominion Bank cited a complex macroeconomic environment and expected further normalization in loan-loss provisions as factors that could impact its ability to achieve its growth targets.
In addition to the restructuring challenges, Toronto-Dominion Bank is still dealing with an ongoing U.S. Department of Justice investigation regarding its compliance with anti-money-laundering rules, the report said. While the bank does not anticipate a major impact on financial results, the resolution of legal or regulatory actions could potentially affect its consolidated results of operations.
The bank’s restructuring comes at a time when some of America’s largest banks are also reducing their staffing levels.
It was reported in October that aside from the country’s largest lender, JPMorgan Chase, the five biggest banks in the U.S. have been quietly cutting jobs all year. In all, these banks have slashed 20,000 positions in 2023, with more layoffs expected.
In one recent move, Citigroup began the next phase of its previously announced restructuring on Nov. 20. The bank did not announce any numbers, but Reuters reported at the time that the reorganization could result in thousands of job cuts.
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