Middle management targeted in Bank of Ireland cost-cutting plan

Bank of Ireland is well advanced in the implementation of its three-year cost-cutting plan which will see 700 of its 10,000 staff leave the bank.

Staff affected by the initiative will initially be middle management over 50 years of age. Many of them are based at its Dublin head office and they will be offered an early retirement deal to leave the bank. Staff at subsidiary companies may also be affected in the longer term as the bank is expected to move to centralise its banking and assurance activities and seek further voluntary redundancies. The three-year cost-cutting plan announced last year by Bank of Ireland group chief executive Mr Maurice Keane aims to reduce its cost structure by €65 million. The bulk of the savings will be achieved through staff reductions, while the bank is also seeking to make more efficient use of its workforce and new technology. Bank of Ireland has been working with consultants Arthur Andersen and PricewaterhouseCoopers in recent months on developing its e-commerce strategy and on how to achieve the desired cost savings. Mr John Clifford, general manager at Mr Keane's office, is leading the group-wide project. Details of his progress are expected to be announced when the bank reports its full-year results on May 11th. A Bank of Ireland spokesman yesterday refused to comment on the cost-cutting plan ahead of its results.

Staff at Bank of Ireland's branch network are unlikely to be affected by the first round of job cuts, as the branches are currently said to be relatively understaffed to cope with the high level of activity associated with buoyant economic conditions.

The primary focus for cost-cutting will be at its Baggot Street headquarters, where there is a high concentration of middle management in the over-50 age group. The bank is then expected to turn its attention to subsidiary companies in an effort to cut down on duplication of processes within the entire group.

The structure of companies such as its life assurance arms, Lifetime and New Ireland, will be reviewed and they are likely to be brought to work more closely together to achieve greater efficiencies. The review will identify where there is currently duplication of processes within the two companies and identify where job cuts could arise.

The bank's personal banking operations are also fragmented, with different sections of the bank providing this service. Again, the bank is understood to be considering centralising these activities and streamlining the number of staff required to operate personal banking on a groupwide level.

Last year, the bank announced the amalgamation of its banking operations in Northern Ireland and Great Britain, which will be run from Belfast.

The bank is also set to outline its e-commerce strategy on May 11th and will be hoping it will boost its share price. AIB has already unveiled its plans for integrating the Internet with its banking operations and is to spend more than €30 million of its total information technology spend on developing on-line channels, primarily for its four million existing customers.