Bank of Ireland saw about 2,000 staff apply for voluntary redundancy, amid a flurry of last-minute applications that came in before a deadline on Wednesday.
The figure equates to more than 19 per cent of the lender’s workforce at the end of 2019 and is well above the 1,400 job cuts that the bank said in August that it was targeting over the coming years.
Sources said on Tuesday, a day before the deadline, that more than 1,400 at that stage had expressed an interest in taking up a redundancy offer. A bank spokesman confirmed the final figure of about 2,000.
The group must now weigh carefully what percentage of the applications it can afford to accept in the coming months without affecting its branch network or staffing in key areas such as handling problem loans as Covid-19 payment breaks roll off.
"The voluntary redundancy scheme has been well received and has involved very professional engagement with colleagues," said Matt Elliott, chief people officer at the bank.
‘Phased approach’
“We will now review the applications with equal care and attention to match them against our business requirements. There will be a phased approach to colleague departures, beginning in November 2020 and progressing through 2021, to ensure customer operations continue smoothly during the transition.”
Bank of Ireland announced in early August that it planned to cut its workforce from 10,400 to 9,000 over time as the ongoing squeeze on lenders' incomes from an extended period of ultra-low interest rates and muted demand has been exacerbated by the Covid-19 crisis.
While the bank offered enhanced terms to employees applying for voluntary redundancy by September 23rd, group chief executive Francesca McDonagh said last month that she had not set a limit for staff exiting under this stage of the plan, and that it would likely be after 2021 before her headcount target was reached.
Five main banks
Ireland’s five main banks have slashed staff numbers by 45 per cent since the 2008 crash to about 26,500 today.
AIB signalled earlier this year that it would cull 1,500 jobs by 2022, and Ulster Bank in the Republic announced two weeks ago that it was planning to cut 266 jobs, or 9.5 per cent of its positions.
It subsequently emerged that Ulster Bank's parent, NatWest, is considering closing down the Irish unit as it weighs up strategic options for the business which has been dogged for years by low profitability and returns.
Goodbody Stockbrokers analyst Eamonn Hughes said earlier this week that banks "probably need to do more on the cost side than in current plans" as they weigh weak shareholder returns and a surge, as a result of Covid-19, in online banking.
Bank of Ireland held extensive engagement with staff over the past seven weeks on its redundancy plans. “The decision to apply was a very important, personal decision that will have been taken with careful consideration,” Mr Elliott said.
