Japan’s biggest bank is set to undergo the most dramatic reduction in head count since it was formed after the nation’s banking crisis shook the industry almost 20 years ago.

Mitsubishi UFJ Financial Group Inc. is considering eliminating about 10,000 positions — about 7 percent of its workforce — over a decade as low interest rates and intensifying competition squeeze profit, people with knowledge of the matter said. That’s more than double the 3,500 full-time roles that President Nobuyuki Hirano said last year that MUFG would cut from its main banking unit through natural attrition and less hiring.

The move is a striking example of how Japanese banks are struggling with an increasingly challenging business environment as the central bank’s negative-rate policy erodes margins and a shrinking population curtails credit demand. MUFG is seeking to reshape itself by closing branches and boosting technology investment, as digital advancements transform the financial industry and provide an opportunity to save costs.

The drop in head count could take place over a shorter time frame than the 10 years estimated, according to the people, who asked not to be identified because the plans are private. Most of the positions being reduced are within Japan, where strict labor laws make it difficult to fire staff. MUFG, established in 2005 from a merger, employs about 147,000 people worldwide.

When asked about the plan, MUFG spokesman Taiki Kitaura declined to comment beyond saying the bank is considering various options.

Tokyo-based MUFG announced a “re-imagining” strategy in May, saying it would cut ¥120 billion ($1.1 billion) of costs over several years through initiatives such as using financial technology to add digital banking channels and streamline back-office functions. Excess staff will be transferred to sales and marketing positions.

“As structural problems such as the decline in lending margins and the shrinking and aging population emerge, we need to bring in new technologies as seen with fintech,” Hirano told reporters on Thursday in his capacity as chairman of the Japanese Bankers Association.

Under the strategy, the bank is also seeking to boost gross profit by ¥180 billion through measures such as shifting thousands of corporate accounts to its banking unit from its trust banking arm in an effort to unify loan oversight and free up resources.

MUFG’s main lending unit had 766 branches in Japan and 75 abroad as of March 2015, according to its website. The group projects net income will climb 2.5 percent to ¥950 billion in the year ending March, the first increase in three years.

The bank’s annual net income per full-time employee has fallen in each of the past four fiscal years, according to data compiled by Bloomberg. Still, the average over the past five years is $104,136, more than global peers JPMorgan Chase & Co., HSBC Holdings Plc and Industrial & Commercial Bank of China Ltd., the data show.

Sumitomo Mitsui Financial Group Inc. is also rethinking its strategy, redeploying personnel and developing fintech. In its business plan announced in May, the lender said it will move 4,000 employees into sales by digitizing branches and making business processes more efficient. The bank said it will save ¥100 billion in the medium term as a result.

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