Bank of Ireland to cut up to 750 jobs over next two years

BANK OF Ireland yesterday announced it is to cut up to 750 jobs over the next two years in the first major jobs cut announcement by a domestically owned bank.

The voluntary redundancy programme will apply to staff working across the group’s businesses in Ireland, Northern Ireland and the rest of the UK.

It is understood that staff working in divisions which offer operational support to the businesses being disposed of by the bank will be affected by the cuts.

Bank of Ireland is disposing of six assets, including New Ireland assurance, Bank of Ireland Asset Management and ICS Building Society, at the behest of the European Commission as part of its cost-cutting plan.

The 750 redundancies announced yesterday are separate to any potential job losses or transfers that may directly arise through the sale of these businesses.

The job cuts will represent a 5 per cent reduction in the bank’s workforce, which currently stands at 14,647. The bank already shed 2,250 jobs between March 2008 and September 2009, mainly through natural attrition and the winding down of businesses in the UK.

Under the voluntary redundancy plan which was devised by Mark Connaughton SC, an independent third party agreed by the bank and the IBOA union, staff in the Republic of Ireland and Northern Ireland will be offered six weeks’ pay per year of service, plus relevant statutory redundancy payments capped at two and a half years. UK staff will receive six weeks’ pay per year of service inclusive of statutory redundancy payments capped at 140 weeks.

Asked about the job cuts at the launch of the National Treasury Management Agency’s 2009 annual report yesterday, Minister for Finance Brian Lenihan said the banks had to address their costs following the large injections of State capital.

“[The banks] can’t expect, given the amount of taxpayer support, to drift into a semi-State mentality in relation to their cost structures. It is vital that they keep their cost structures in line,” Mr Lenihan said.

The IBOA’s Larry Broderick said that Bank of Ireland staff were being asked to pay a high price for the mismanagement of the bank.

“It is incumbent on senior management to learn the lessons from past mistakes in order to bring about a fundamental change in the culture that has operated in Bank of Ireland.”

Bank of Ireland is the first domestically owned bank to announce job losses of this scale. Last week, Colm Doherty, AIB’s group managing director, told staff that the bank “will be a smaller organisation”, though he said no final decision had been taken as regards to specific action on job losses.

Approximately 550 staff members have left Anglo Irish Bank since September 2008, while National Irish Bank announced 150 redundancies in December last year. Some 750 banking jobs were lost due to the closure of Halifax (owned by Bank of Scotland Ireland) earlier this year, while Ulster Bank has shed 1,000 jobs.