Major lender’s overhaul highlighted mounting cost pressures and shifting growth bets
Scotiabank’s latest overhaul underscored how Canada’s big banks have been tightening costs and reallocating capital as credit risks and funding pressures built across the economy.
The Bank of Nova Scotia said it eliminated about 3,000 roles through a restructuring program completed late last year, a move that formed part of a broader push to improve efficiency.
Speaking at an event, chief executive officer Scott Thomson described the restructuring effort as lengthy and far‑reaching.
“The restructuring charge, which was a multi-month, probably multi-quarter effort to make sure that we did this the right way, was significant,” Thomson said. “Three thousand people ended up leaving the building.”
The bank previously disclosed that it recorded “a restructuring charge and severance provisions” and other related costs of $373 million, primarily tied to workforce reductions across its global operations.
In an earlier statement, Thomson acknowledged the human toll of those decisions.
“While these types of decisions are always difficult, they are nevertheless necessary as we work to boost the value of the Canadian bank,” he said.
“We do not anticipate additional charges, but will remain focused on running our bank as efficiently as possible, including taking full advantage of emerging technologies.”
Restructuring focus and earnings backdrop
Thomson said the layoffs have been concentrated in parts of the business where Scotiabank did not expect outsized growth and saw the opportunity to rationalize, given the focus going forward. Affected staff largely worked in areas that were not central to the bank’s new strategic priorities.
Despite the restructuring charge, Scotiabank’s most recent quarter, which ended Oct. 31, 2025, beat analyst expectations, helped by stronger profits in its global banking and markets division.
An earlier restructuring charge was designed to trim expenses even as provisions for credit losses edged higher. That period still produced a Q4 earnings beat and what Thomson described as a very positive year driven by global wealth management and capital markets.
Labour market clouds and mortgage implications
Job cuts at one of Canada’s largest lenders feed into a wider debate about how a slowing economy might ripple through employment and credit.
Beata Caranci, chief economist at Toronto-Dominion Bank, previously warned that Canada could see about 100,000 jobs lost during a downturn, with more than 70,000 private‑sector roles already shed over a short period.
Aside from Scotiabank, TD also reported laying off approximately 2% of its global workforce, or around 2,000 employees in May 2025. This move was part of a broader restructuring plan aimed at cutting costs and accelerating investments in digital technology and artificial intelligence.
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