Staff brace for jobs cull in banking overhaul
Anglo and Nationwide first to feel effects of IMF bailout terms
Published 26/01/2011 | 05:00
HUNDREDS of jobs are to be axed at Irish Nationwide and Anglo Irish Bank under a plan to be submitted to the European Commission by the end of the month. The news means the 1,600 staff at the two institutions will be the first to learn their fate in the year's massive banking jobs cull.
Thousands of bankers will lose their jobs this year as Ireland's banks are downsized as part of the IMF/EU bailout terms.
Up to 500 staff will exit Bank of Ireland under a severance programme agreed by the bank last year while discussions about potentially thousands of job losses at AIB are under way.
Barrister Mark Connaughton is mediating the terms on which discussions about job losses at AIB will proceed. A final decision on job losses at the bank is expected in April.
A previous redundancy plan, drawn up by AIB's former managing director Colm Doherty, included the axing of 3,000 jobs.
Previous AIB staff who took redundancy packages were offered eight weeks' pay for every year of service, although a new package is expected to be less generous. The terms of any such severance deal will have to be notified to and approved by the Finance Minister.
The Irish Bank Official's Association will be seeking to preserve agreements on dealing with redundancies in the current round of discussions. But as the bank would have collapsed without a government cash injection, and with the political anger at the payment of bonuses at the bank last year, one source admits staff could be offered statutory redundancy.
A spokesman for Finance Minister Brian Lenihan said he would take standard market rates and industrial relations protocols into consideration in approving the severance deal.
AIB's executive chairman David Hodgkinson is working with a team of consultants on a plan for the bank's future that will be considered by the Central Bank, NTMA, Department of Finance, IMF, ECB and European Commission, as agreed in the bailout deal.
It is expected that staff providing support for AIB's international businesses, which have now been sold, will be among the first to go in a new round of redundancies.
The first job losses may come as plans to merge Irish Nationwide and Anglo Irish Bank's loan books and transfer the institutions' deposits to healthier banks progress. "Cleary there will be rationalisation, clearly there will be job cuts," one source said last night.
Industry sources stressed, however, that it was wrong to assume that all of the staff dealing with the deposit side of Irish Nationwide and Anglo's books would lose their jobs.
"There's strong transfer of undertakings legislation here," said one source. "If the deposits go, the people will go with them." Areas like IT, support services and back-office functions are likely to suffer heavy jobs losses as there would be duplication between the two institutions.