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Fears of 4,000 more job cuts as AIB gets set to axe 2,000 staff

BAILED-OUT bank AIB will cut more than 2,000 employees from its payroll by the end of next year.

The embattled group recorded a staggering €10.4bn loss for 2010 -- a record for the financial institution.

Although some cuts had been anticipated now that the bank is 93pc-owned by taxpayers, bank union officials were outraged at how staff were made the "scapegoats" for the failing industry.

And unions anticipate that the overall employee losses will be closer to 6,000 as the bank goes through a major restructuring change.

The announcement was a slap in the face for workers who have struggled to restore the bank's fortunes and came after AIB revealed that it would gift its top bankers €40m in bonuses just before Christmas.

But AIB said today that the massive job losses were needed for the new "slimmed-down" core bank.

Larry Broderick, General Secretary of IBOA The Finance Union said that it was a "very black Tuesday for staff in AIB."



Fate

"We're appalled that AIB staff are waking up to find out their fate over the news wires."

Mr Broderick said that once staff get over the initial shock, they will be angry that they are "being made to pay the price for the reckless mismanagement of the Bank by an elite group of bosses".

Almost €13bn of public money is going to be pumped into the bank. But AIB said that its deposits fell by €22bn to €52bn last year as the bank's loss increased from €2.3bn a year earlier.

David Hodgkinson, interim executive chairman of AIB, said that the scale of the cuts is necessary in order to ensure the viability of the bank on the market.

"They (job cuts) will be spread across the organisation because the bank as a whole has to slim down from the size it was," he said. "We expect to get the vast majority on a voluntary basis."

He said that the bank is open to engagement about the level of the redundancy packages.

"My belief is that we should be reasonably generous because people are losing their jobs and their livelihoods," he said.

Minister for Public Expenditure Brendan Howlin said: "It's a bleak day for all those employed by the banks generally."

He said that AIB had become a "speculate bubble bank" and needed to ensure that never happened again.

But he warned that despite the bank being majority owned by the state, the Government cannot "micro-manage" it. "We set the parameters," he said.

clairemurphy@herald.ie


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