AIB may accelerate job cuts after hiring freeze

AIB, which introduced a hiring freeze in recent months to reduce staff numbers, may seek to accelerate job reductions next year as ultra-low European Central Bank (ECB) rates squeeze banks’ income, according to sources.

The hiring freeze, together with natural attrition and “business as usual” small voluntary redundancy schemes that have been offered in targeted areas in recent years, are designed to lead to a continued reduction in employee numbers.

The bank’s average number of staff fell to 9,801 in 2018 from 10,137 the previous year, according to its latest annual report. The figure is down from about 25,000 before the financial crisis.

Sources said that there are no plans for large-scale layoffs. In March, the group’s chief financial officer said that the bank’s 1,400-strong workforce in its loan-restructuring unit could be targeted for cuts as the bank’s bad-debt levels declined to “normalised” levels.

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“AIB is a large, agile organisation which is focused on being simple and efficient, and this is supported by a continual focus on managing costs,” a spokesman said on Friday. “In line with this, the bank continuously reviews our resourcing requirements, and VS [voluntary severance] is one solution offered to meet these requirements in certain areas.”

Temporary hold

He added: “We have advised the union that a temporary hold on recruitment and promotion has been put in place in line with the bank’s renewed focus on cost discipline.”

Ulster Bank chief executive Jane Howard told The Irish Times in an interview this week that the bank is planning a fresh round of job cuts, while Permanent TSB chief executive Jeremy Masding said in July that in the climate of “lower for longer” official interest rates, the “key battleground” will be in improving operating efficiency, which analysts have taken to mean cost-cutting.