Bank giant National Australia Bank Ltd [ASX:NAB] will see further job cuts this week, as six thousand employees have already been let go.
This morning their shares dipped by 0.54%. NAB shares have been dropping all throughout 2017 and into 2018.
Their $5.3 billion annual net profit was announced last November.
As of late, their market cap sits at $79.392 billion and a massive enterprise value of $169.67 billion.
NAB’s profit margin is up by 30.7% with a solid operation margin of 52.99%
Management effectiveness has been on the mark, return on assets stands at 0.79% as well as a 12.04% return on equity.
Why is NAB dropping so many of their workers?
It mainly has to do with technological factors and how a job operates on an automatic level.
Dominic Barton global managing partner of Mckinsey and Company states that 30% of the activities involved for 60% of jobs are automatable.
Mckinsey and company have worked with NAB in regard to strategy.
Dominic Baton stated:
‘If you look in the next five to seven years the number of jobs that will be displaced — driven by technology in high-paying jobs…it could be in financial services and technology-related areas and so forth — is very significant.’
Dominic believes automation and software programs will be capable of analysing information and make deciding factors which will transform the entire business landscape.
Jobs which once required well-paid knowledgeable workers will now be conducted by a mere computer system.
Finance professional, Peter Chung was retrenched from NAB half a year ago.
‘I say [technology has] reduced the size of jobs … the content of jobs and therefore at the end of day the number of jobs available’, Peter said.
Despite holding multiple degrees and almost 30 years of experience with the company, he was still made redundant.
How will Nab tackle the future?
NAB will be hiring 2,000 new workers in the same period of their cuts, as individuals will need to be able to operate their automatic system.
NAB CEO, Andrew Thorburn states:
‘The internet is changing things. I think overall that’s very good for people, but there’s a huge shift in the type of work that’s happened in Australia for the last 30 to 40 years.’
Some NAB workers will be redeployed into other sectors within the business, but it is unclear how many actually will.
Editor, Markets & Money
PS: Nobody knows when a recession could hit, one may very much be around the corner ready to throw a spanner into your finances. Vern Gowdie from Markets & Money wrote all about how to counter the effects of a recessions in the free article ‘The Aussie Recession Survival Guide’.