Banking sector already shrinking due to downturn
BANK of Scotland (Ireland's) plans to scrap 750 jobs brings the number of job losses announced in the sector over the past 14 months to the 6,000 mark.
So far, the bulk of the signalled job losses have been through natural attrition among the country's two biggest banks.
Allied Irish Banks and Bank of Ireland have parted company with a total of more than 3,200 employees between them over the period, with foreign-owned banks leading the pack on the redundancies front. However, unions and analysts fear that thousands of further job losses are coming down the tracks as the main state-backed institutions start to swing an axe at their unwieldy cost bases.
"The two main banks are coming under increasing pressure in this regards, particularly as they are looking to raise (billions of euro of capital) in the market in the coming months," said a senior banking analyst. "They must be able to present investible cases to get the backing of shareholders."
AIB's new chief indicated in early December that redundancies would form part of his 1,000-day plan to turn around the group's fortunes.
In an email to staff within weeks of taking up his role, he said that "tough decisions are needed to further reduce our costs".
BoI chairman Pat Molloy told shareholders at the group's extraordinary general meeting last month that "costs remain very high on the agenda", despite having lost 1,700 employees last year through natural attrition.
BoSI yesterday became the first lender during the crisis to flag compulsory redundancies, although its offer of seven weeks' pay per year of service to staff is broadly in line with recent packages outlined by rivals.
Employees that are being made redundant will receive a minimum of 13 weeks' salary, capped at two-and-a-half years. Most of the staff are expected to part between the end of May and July, as the bank's 44-branch Halifax network is closed down.
In January last year, Ulster Bank, a unit of Royal Bank of Scotland, became the first lender to announce a severance scheme, initially targeting 750 as it closed down its First Active branches. The target was later raised to 1,000.
Anglo Irish Bank came out in November with a plan seeking 230 voluntary redundancies, on top of the 270 staff it had lost over the previous 12 months through natural attrition.
ACC Bank shaved 200 of its 660-strong workforce last year, while Permanent TSB sought 120 redundancies, in addition to 180 employees taking the lender up on an incentivised career break. National Irish Bank is currently looking for 150 redundancies over 18 months as it closes 25 of its 58 branches around the country.