How Andrea Orcel "purged" 11,000 people at UniCredit
Andrea Orcel, the workaholic investment banker with a penchant for calling people at 5am, became CEO of Italian bank UniCredit in 2021. Since then, the bank's stock price has increased by almost 10 times. This didn't come without sacrifice.
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Speaking on a podcast with Norges Bank this week, Orcel said that "culture is the lynchpin of everything" and a good culture is a guarantee of eventual success. He also said that, "inevitably, to change it, you have to purge people who are not in that culture." Making cuts was one of the earliest things he did after assuming the role, including removing a co-head structure, much like Citi has (kind of) been doing in recent years.
In the podcast, Orcel said that there were 80,000 people when he joined, but there are 69,000 today, implying that at least 11,000 have been purged. How did he decide who didn't make the cut?
Orcel said that one of his earliest tasks was "interviewing, directly or indirectly, 20,000-30,000 people" to find out their values and what "made them tick." He figured out the cultural "pillars" of the company from these responses (integrity, ownership and care, apparently) and built the company's strategy around them. People lacking those attributes have presumably been ejected.
Orcel also said he initially used a top-down management style to instil values, but that the culture is now bottom-up instead. He doesn't mandate that people come to the office at specific times. However, people at UniCredit work similarly long hours: "because I work really hard, I drag them."
UniCredit is attempting to hold onto its best people even in fields susceptible to AI and automation. Orcel said that, a year after he joined, the bank created a "risk healing unit" to reskill high-quality people in disintermediated jobs. 650-700 people have gone through the unit so far.
While Orcel's purging seems to have benefitted the share price, he has reportedly faced criticism from UniCredit's board for the performance of its investment bank. Reuters reported in October that the bank had not landed any major deals despite large investments. Orcel said that a full cultural transformation for a company the size of UniCredit can take more than a decade; perhaps more purging is necessary.
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