SYDNEY, Australia: Australia's ANZ is embarking on one of its deepest restructurings in years, with new CEO Nuno Matos announcing 3,500 job cuts and warning staff to brace for more "ugly" decisions ahead.

The overhaul, which includes axing an additional 1,000 contractor roles, marks Matos's first significant step since he took charge in May.

The lender said it would book an A$560 million (US$369 million) restructuring charge tied to the cuts, which will be rolled out by September of next year. The shake-up comes as ANZ, the smallest of Australia's "Big Four" banks, looks to streamline operations and close the gap with rivals Westpac and National Australia Bank.

"I hate to do this, but it's for the future of the company," Matos told the Financial Review Asia Summit in Sydney. "Those decisions are very tough to take. We don't want to take them because they're going to impact people, our people, their families, and it should be the last resort."

The new CEO, who previously ran HSBC's global personal banking and wealth arm, said the cuts would reduce duplication, end projects not tied to ANZ's core priorities, and lay the foundation for a more "performance-driven culture."

"At this point, our change will be more elevated and uglier, so we are cautious in terms of how fast we can go," Matos said. "This is about being fast and safe at the same time."

ANZ stressed that most customer-facing roles would not be affected and reiterated its promise to keep jobs at Suncorp Bank after last year's A$4.9 billion acquisition.

Analysts said the restructuring could improve profitability, particularly in the retail and technology units. Citigroup's Thomas Strong noted productivity gains could emerge. At the same time, Atlas Funds analyst Michael Haynes said the benefits may not be evident until 2027 due to the timing of ANZ's financial year.

The announcement pushed ANZ shares up one percent in early trading, though the stock later slipped to finish 0.5 percent lower at A$32.81.

Still, the cuts sparked sharp criticism from the Finance Sector Union. "When the FSU asked ANZ who would actually do the work of the 3,500 sacked staff, the bank had no answer, except to say the work would simply stop," said FSU National President Wendy Streets. "That's not a plan, that's chaos."

ANZ is scheduled to release a broader strategic review on October 13.