THE ANNOUNCEMENT that Anglo Irish Bank staff had awaited for months finally arrived yesterday when they were told that the bank would seek up to 230 departures immediately and a similar number over two years.
Following the initial round of cuts and normal staff departures, the bank’s headcount will fall from 1,800 in September 2008 to 1,300.
Employees were informed through briefings and a webcast by the bank’s chief executive Mike Aynsley. He said in a statement that Anglo would “undergo radical change in the coming months”.
“Our mandate, as a nationalised bank, is to keep the public interest to the fore and the restructuring of New Anglo Bank will reflect this objective,” said Mr Aynsley.
The bank said that its preference was for voluntary redundancies in Ireland and the UK.
The first wave of job cuts will address “surplus capacity”; the next will follow the submission of a restructuring plan which must be sent to the EU Commission at the end of this month under the terms of the bank’s recapitalisation.
The redundancies had been widely expected and were hardly a surprise when first mooted earlier this year given that the bank has been doing little or no lending.
Anglo has become a so-called “zombie bank”, avoiding new lending and seeking to plug the hole in its capital reserves.
Spiralling losses on the bank’s property loan book have forced the bank to take €4 billion from the Government to replenish its capital reserves. It is expected to seek additional State capital, possibly as much as €6 billion, as it incurs further losses on the €28 billion in loans being sold to Nama.
Staff numbers will be reduced at once with further job cuts likely to occur over the course of next year and the following year “framed against a detailed review of structures, processes and IT systems”.
The bank said that in the second phase of job cuts, where work would be outsourced, it would try to move staff to the outside entity.
The terms and conditions of the redundancies, which have been approved by the Department of Finance, are about average for public sector companies but roughly half of what is on offer currently at Aer Lingus, for example.
Staff in Ireland are being offered four weeks’ pay for every year of service up to 52 weeks in addition to the statutory entitlement. This means that an employee for five years on annual pay of €100,000 will receive about €60,000. The packages on offer to staff in the UK and the US are less favourable.
