Ten out of the 16 A-share listed Chinese commercial banks have witnessed a shrinking workforce in the first half of 2016, according to analysis of their latest interim financial reports.
China's four biggest State-owned commercial banks by assets saw a total decrease of more than 25,000 staff members as of June 30, compared with the end of 2015. Employment at China Merchants Bank Co Ltd, a national joint-stock commercial lender, also dropped by more than 7,700 over the same period.
Some media reports described the shrinkage as "a big wave of job cuts", but China Merchants Bank denied that in a statement, saying that the shrinkage of staff numbers was mainly due to an adjustment of its employment mode in line with the State's laws and regulations.
CMB said it had reduced the number of external nonstaff workers and entrusted some noncore businesses with professional service providers.
Statistics also showed that as of June 30, there was a reduction of 1,715 external nonstaff workers at the Agricultural Bank of China Ltd from the end of last year.
Sources in the banking industry said several factors led to the shrinkage, including layoffs and the rapid growth of online services. They said the reduction of staff was part of a restructuring taken by the banks for their development.
Wu Qing, deputy director of banking research at the Development Research Center of the State Council, said the employment shrinkage in the banking industry was the same as with other industries that were faced with technological change.
"Rising labor costs and digitization contributed to the staff adjustment," he said.
China's economic slowdown and the central bank's decision to further liberalize interest rates have put great pressure on banks' profits, analysts say. As a result, many banks resorted to cost cutting.
In the meantime, job-hopping by employees also became a major factor behind the staff shrinkage.
"Privately-owned banks and emerging financial institutions, which offer more appealing compensation packages, have attracted many bank professionals," said Guo Tianyong, director of the research center of the Chinese banking industry at the Central University of Finance and Economics in Beijing.
