CATALUNYA CAIXA is to slash its workforce by a third as it looks to shrink its balance sheet and restructure its operations.
The nationalised lender reached an agreement with unions on Wednesday which will see 2,153 of its 7,200 employees made redundant, and the salaries of the remaining staff cut.
In a statement the bank said it would also offer voluntary redundancy to its seasonal employees, and reduce the working hours of those on flexible contracts in a bid to further cut its outgoings.
Those being laid off will receive a redundancy package equal to one months pay for each year they have worked.
The decision is expected to be approved by the management committee in the next week.
The move comes as the troubled bank seeks to improve its appeal to buyers, and is part of a deal it made with the EU following a €12 billion bail out last year.
Catalunya Caixa was formed in 2010 from the fusion of three savings banks in the northeastern Catalonia region, and is the second-biggest of the four banks that have been nationalised by the Spanish government to save them from collapse.
Last month another bailed out bank, Bankia, announced it was to axe 800 external directors as part of its own cost reduction efforts.