Allied Irish Banks axing 2,500 jobs

 

Allied Irish Banks has confirmed it is laying off 2,500 workers - 500 more than it originally signalled.

After leaders of the bank workers' union met AIB executives and Department of Finance officials, the bank said it would be seeking half of the redundancies this year.

AIB chief executive David Duffy said the bank was aiming for voluntary lay-offs and a fair severance package.

"We aim to implement a severance package that is fair to people at all levels in the bank, while reflecting the very difficult financial position that AIB is in and the huge taxpayer support on which we continue to rely," Mr Duffy said.

"I am confident that AIB will achieve sustainable profitability with a reduced cost base essential to delivering this recovery."

The Irish Bank Officials Association said talks would open with AIB senior management next week.

Larry Broderick, IBOA general secretary, said the scale of the cuts again shows ordinary bank workers suffer the consequences of mismanagement.

"This continuing haemorrhage of jobs in the financial sector shows no signs of abating," the IBOA leader said.

"We need a realistic strategy to strengthen existing employment and create alternative opportunities."

The aim of the job losses is to cut costs by 170 million euro in a full year.

AIB said full details on the redundancy programme will be announced in early April.

It is understood bank chiefs are under pressure from Government to ensure pay-off arrangements do not exceed packages already offered to Health Service Executive workers this year - three weeks' pay for every year of service on top of two weeks' statutory redundancy.

The bank confirmed it was working within Government rules and wanted a speedy conclusion.

"The programme forms an important part of AIB's return to sustainable profitability, allowing the bank to focus on its customers and support Ireland's economic recovery," the bank said.

AIB is the latest big bank to slash its workforce in Ireland after Bank of Scotland (Ireland) announced in 2010 it was pulling out of the country and Ulster Bank announced 950 redundancies in January.

AIB, which first announced a planned 2,000 redundancies last April, is effectively under State control, although it has narrowly avoided nationalisation.

It has received a bailout of 20.7 billion euro (£17.3 billion) when monies poured into its subsidiary, EBS, are also included.

Taoiseach Enda Kenny said the announcement of the job losses was a difficult day for workers but added he hoped they could find a future in Dublin's IFSC as it aims for 10,000 new jobs over five years.

"I would hope that some numbers of those who worked in AIB would be able to gravitate to that sector," he said.

"Insofar as the Government are involved, obviously it's a difficult day for anyone to say I'm not going to have a job over whatever period."

The Taoiseach said Government departments would be ready to stand by affected workers.

PA

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