AIB job losses the darkest hour
Today's expected announcement of up to 2,500 job losses at AIB represents the biggest toll yet in the continuing shakeout in the Irish banking and insurance sector. However, despite all the bad news from the banks, we are seeing the first signs that the worst of the deluge of job losses, which we have endured for the past four years, may be almost behind us.
The fact that bad news had been expected at AIB doesn't make it any easier for those who are about to lose their jobs at what had been Ireland's largest bank. However, instead of the predicted 2,000 job losses, AIB is reducing its workforce by 2,500 instead, making it by far the biggest single job loss announcement from any Irish bank ever.
In the boom years, more than 50,000 people were employed in banking and insurance. These financial services workers were an elite, by far the best-paid of any group of private sector workers. However, they have since been hit hard with several overseas banks, including Halifax which pulled out with the loss of 750 jobs in 2010, exiting the Irish market altogether.
Those banks that remain, both Irish and foreign-owned, have drastically scaled back their operations, with thousands of previously well-paid jobs being lost. Bank of Ireland has said goodbye to more than 1,000 of its staff, Ulster Bank to 2,000 (in two separate rounds of job cuts, in 2009 and 2012), while in the insurance sector Aviva is shedding up 1,200 jobs while another 1,000 have gone at the former Quinn Insurance.
Despite the previous carnage, the scale of the job losses expected to be announced by AIB today still has the capacity to shock.
When spouses, partners, children, siblings and other family members are included, tens of thousands of people will be directly affected by today's bad news. We can only offer them our commiserations, inadequate though they may be.
However, the darkest hour may be just before the dawn. Yesterday the CSO published its most recent Quarterly National Household Survey, which shows that, on a seasonally-adjusted basis, employment rose by 10,000 in the final quarter of 2011. This was the first such rise recorded since the final quarter of 2007 and would seem to indicate that the spate of job creation announcements of the past year is finally feeding through into employment levels.
An increase in employment levels is the key to restoring consumer confidence and getting the domestic economy growing once again. While the fourth quarter increase in employment was very modest we have to start from somewhere. A few more quarters of employment growth could begin to lift the gloom in which we have been shrouded for the past four years.