MADRID (Reuters) -Spanish bank Sabadell has reached a deal on Friday with a leading union to lay off up to 1,605 employees in its home market, fewer than the more than 1,900 initially planned.

The agreement with Comisiones Obreras (CCOO) was reached after the bank met some of the union’s demands, such as setting a lower number of layoffs, capped at 1,380, a union spokesperson said.

“If 1,380 employees take redundancy leave the bank would accept it,” the union spokesperson said, adding that if more decided to leave cuts would be capped at 1,605 employees.

Sabadell issued a statement to Spain’s National Securities Market Commission (CNMV) confirming the deal.

“Today Banco Sabadell has reached an agreement with all the sections of the unions negotiation committee which represent the employees, in the framework of a redundancy procedure for Banco Sabadell in Spain which will affect a maximum of 1,605 employees,” the bank said in a statement.

The cost of the process is estimated at 269 million euros ($312.15 million) before tax, the bank said.

This would have a negative impact of about 23 basis points on Common Equity Tier 1 (CET1) fully loaded ratio, the strictest measure of solvency, it added.

This impact will be neutralised by capital gains from the sale of its bond portfolio, the bank said.

The agreement will lead to savings of at least 100 million euros ($116.01 million) per year before tax, in line with what was announced in Banco Sabadell’s Strategic Plan, the bank added.

Spanish banks and their counterparts elsewhere in Europe are cutting costs and adapting to a shift toward online banking, either by themselves or through tie-ups, as their overall profitability is eaten away by ultra-low interest rates.

In September, Sabadell presented unions with a plan to cut 1,936 jobs and close or partially shut 496 branches, amid a shift towards online banking.

It is the lender’s second workforce reduction in less than a year after recently cutting 1,817 jobs in Spain, where it employs a total of 14,648 people.

A total of 320 branches will close, almost a fifth of the bank’s more than 1,600 branches in Spain, while the rest will open a few days a week, one of the sources told Reuters in September.

($1 = 0.8618 euros)

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