RBC restructures operations post-HSBC Canada acquisition, leading to employee layoffs across various divisions
Royal Bank of Canada (RBC), Canada's largest lender, has begun layoffs following its $13.5bn acquisition of HSBC's Canadian operations last year, according to two sources familiar with the matter, as reported by Reuters.
The layoffs, which began earlier this week, have affected employees in technology and operations, personal banking, and commercial banking teams.
The exact number of impacted employees remains undisclosed, and it is uncertain if further layoffs will occur.
In the summer following the HSBC Canada acquisition, RBC restructured its personal and commercial banking divisions into two standalone segments and reorganized its senior leadership.
An RBC spokesperson acknowledged that these changes led to “some difficult decisions,” resulting in certain colleagues leaving the bank.
The spokesperson added that RBC has provided support and assistance to those affected.
The spokesperson further stated that the restructuring positions RBC to leverage its global scale, streamline operations, and promote leaders and talent focused on client-centric growth opportunities.
As of January 31, RBC employed 94,624 full-time staff, marking a 5 percent increase from the previous year, primarily due to the HSBC acquisition.
Commercial banking head Sean Amato-Gauci said in a memo on Thursday, seen by Reuters, that some employees had left the bank following the changes.
In a separate memo, personal banking head Erica Nielson noted that several team members had joined from outside the business segment or moved into new roles as part of the reorganization.
One source said some of the layoffs occurred at RBCx, the lender's tech and innovation banking arm, which falls under the tech and operations team.
In a recent development, RBC increased CEO Dave McKay's 2024 salary by 61 percent to $24.5m, which includes a $4m bonus related to the HSBC Canada acquisition—the largest deal in RBC’s history.
Additionally, RBC reported a net income of $16.2bn for the fiscal year ending October 31, 2024, reflecting an 11 percent increase from the prior year.
This growth was bolstered by the inclusion of HSBC Canada's results, which contributed $453m to the net income.
The bank's wealth management and capital markets divisions also experienced significant growth, with wealth management income increasing by 48 percent and capital markets income rising by 24 percent, as reported by Reuters.
