Business Irish

Tuesday 24 October 2017

Bank braced for severe job cuts when new CEO installed

Siobhan Creaton

STAFF at Allied Irish Banks are braced for severe job losses when a new chief executive is installed.

The bank has been drastically cutting its 10,000-strong workforce since the bank guarantee was introduced in 2008.

Since then some 1,200 staff have left the bank through early retirement and there has been speculation that AIB could seek to cut another 2,000 jobs.

Most of the jobs in the immediate firing line are likely to be those providing support to its Polish bank and other overseas operations being disposed of.

Sources within the bank suggest any announcement regarding jobs is likely to be delayed until a new boss is installed, but that it will happen quickly after that.

"There's going to be a new chief executive and a new management team, it's wrong to say they won't have a view (on the restructuring) and at this stage it's likely to be a 2011 event," said one.

"But there's no getting away from the fact that AIB will be a smaller organisation and costs will have to be cut. When staff make up €2 of every €3 in costs, you're clearly going to have to cut people," the source added.

Responding to yesterday's announcement on AIB, the Irish Bank Officials' Association said it hoped it would stall the sell-off of its prized assets.

General secretary Larry Broderick said: "The bank should now reconsider its disposal strategy before any more assets are sold -- and especially the plan to sell of First Trust Bank in Northern Ireland and Allied Irish Bank (GB) -- which makes even less commercial sense now than it did when first announced at the beginning of the summer."

The union will be seeking an early meeting with Finance Minister Brian Lenihan and AIB's senior management team to clarify whether the imminent departure of AIB managing director Colm Doherty and chairman Dan O'Connor signifies a change in direction at the bank.

Mr Lenihan said 43 directors and 31 senior executives had left their positions in six of the institutions covered by the bank guarantee since 2008.

Irish Independent

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