Ally Financial said on Monday job cuts in various divisions of the digital banking firm will affect nearly 5% of its workforce.

Spooked by a turbulent economy, several banks have had to cut jobs in recent months to better navigate inflation and high interest rates.

"After taking steps over the past year to pause hiring and manage staffing expenses through natural attrition, we have made the difficult choice to selectively reduce our workforce," Ally spokesperson Peter Gilchrist said in an emailed statement.

"News is difficult, but necessary, and impacts less than 5% of our workforce."

The Detroit-based company offers various financial products and is best known for its auto-loan business.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru and Saeed Azhar in New York; Editing by Shinjini Ganguli)