06/21/2017 08:04 EDT | Updated 06/21/2017 08:21 EDT

Royal Bank to cut 450 jobs, primarily at head office locations in Toronto area

TORONTO — Royal Bank of Canada (TSX:RY) said Wednesday it is cutting 450 jobs, primarily from its head office locations in the Greater Toronto Area, as it tries to revamp its business in light of shifting client preferences.

"As always, we consolidate where necessary so that we can reinvest in key areas including digital, data, new technology as well as investment in high-growth business areas," spokeswoman Catherine Hudon said in an email.

The bank, which has more than 80,000 full- and part-time employees, said it is also making hundreds of other changes including promotions, transfers and the creation of new roles and teams.

RBC said it will provide support to those affected by the changes, including career transition services and continued salary and benefits for a period of time.

Canadian banks have been shaving costs in recent years as they strive to grow their earnings amid slowing loan growth at home.

They have also been investing more heavily in technology in order to suit the needs of their clients, particularly younger, tech-savvy customers who wish to do more of their banking online rather than at bricks-and-mortar branches.

Edward Jones analyst Jim Shanahan said that as a group, the Canadian banks have taken about $3 billion worth of restructuring charges over the past five years.

The bulk of those restructuring charges has been earmarked for employee severance and investments in digital technology, Shanahan said.

"They're replacing people with systems and processes that are driven by technology to reduce their costs," he said.

But there has been no dramatic reduction in bank branches during that time, Shanahan added.

"It would seem to me that there's some opportunity for the banks to get quite a bit more aggressive, actually," he said.


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