Santander cuts 320 US jobs in digital shift, Bloomberg reports

Spain's Banco Santander SA (SAN.MC), opens a new tab

 has cut roughly 320 jobs in the U.S. as it seeks to focus more on digital operations, Bloomberg News reported on Sunday citing a person familiar with the matter.

The Spanish banking giant laid off about 2.7% of U.S. employees in recent days, out of a workforce of about 11,800, the report said, adding that the dismissals are focused on the bank's retail operations.

Santander did not immediately respond to a Reuters' request for comment on the report.

"We are evolving our U.S. business, investing in digital capabilities and simplified processes to adapt to changing customer needs," Santander said in a statement to Bloomberg News.

The reported move follows Santander's push towards digital operations in recent years. The bank will soon launch its digital bank service in Mexico, Santander Mexico's head of digital and innovation Matias Nunez said in January.

Inflation has fallen dramatically from the 40-year highs it notched two years ago, but recent data has investors wondering whether progress is stalling. A series of hot January prints is “a warning sign that this is not going to be as simple as we thought,” says Roger Aliaga-Díaz, global head of portfolio construction and chief economist, Americas at Vanguard.

In other words, the easy gains are likely behind us as the so-called “last mile” in the inflation fight proves more difficult than expected, at least for now. That has major implications for the Federal Reserve and the path of monetary policy. Stubborn price pressures could delay highly anticipated rate cuts even further.

Late last year, bond market investors were pricing in six interest rate cuts for 2024, with the first of those slated as early as March. Now expectations have shifted to three or four cuts, with the first coming at the central bank’s June meeting.

In the long run, however, economists say investors shouldn’t lose hope that all progress is in the rearview mirror. A major rebound in inflation isn’t the base case for most analysts, and there are still signs of further disinflation on the horizon—not to mention how short-term distortions may be coloring the data. Some economists also say that housing inflation, which has been a major driver of headline inflation, isn’t accurately reflected in the government’s data.